Bloomberg News

Gates Fund Buys $390 Million Stake in Mexico's Femsa

December 20, 2007

Microsoft Corp. (MSFT:US) founder Bill Gates's private investment fund bought about $390 million of shares in Fomento Economico Mexicano SA, becoming the second-largest holder of the U.S. shares of Latin America's largest beverage company.

Gates's Cascade Investment LLC bought 10.8 million American depositary shares of Femsa, as the Monterrey-based company is known, or about 3 percent of the company's market value, Femsa said in a statement. Cascade holds 5 percent of the ADRs, second only to 5.3 percent owned by Genesis Fund Managers, according to data compiled by Bloomberg (FMX:US).

``This type of decision by large investment funds is a recognition and show of confidence in our company's performance,'' said Femsa Chief Executive Officer Jose Antonio Fernandez in the statement.

Cascade manages securities owned by the Bill & Melinda Gates Foundation, the world's largest charitable fund. Cascade's Femsa investment includes 5 percent of D-L shares, 5 percent of D-B shares and 1.2 percent of B shares, according to a filing today with the U.S. Securities and Exchange Commission.

Femsa rose $2.53, or 7.5 percent, to $36.26 at 4:21 p.m. in New York Stock Exchange composite trading, before Cascade's investment was announced. It was the biggest increase since May 14, 2004, and came after Carlos Laboy, an analyst with Credit Suisse, raised his 12-month target price on Monterrey-based Femsa's U.S. shares to $57 from $45.

To contact the reporter on this story: Andres R. Martinez in Mexico City at amartinez28@bloomberg.net.

To contact the editor responsible for this story: Patrick McKiernan at pmckiernan@bloomberg.net.


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Companies Mentioned

  • MSFT
    (Microsoft Corp)
    • $45.74 USD
    • 0.58
    • 1.27%
  • FMX
    (Fomento Economico Mexicano SAB de CV)
    • $84.89 USD
    • 2.95
    • 3.48%
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