Bloomberg News

Hypermarcas Advances Most in Two Months on Asset Sale

October 24, 2011

(Updates with closing prices starting in second paragraph.)

Oct. 24 (Bloomberg) -- Hypermarcas SA, the Brazilian consumer-products company that has made at least 12 acquisitions since the start of 2010, gained the most in two months after agreeing to sell some assets as it seeks to concentrate in pharmaceutical and personal hygiene products.

The stock rose 5.3 percent to 9.59 reais at the close of trading in Sao Paulo, the steepest advance since Aug. 23. It’s still the worst performer on the Bovespa index this year with a 57 percent slump. The benchmark is down 18 percent.

Hypermarcas, based in Sao Paulo, agreed to sell a plant in the Brazilian southern state of Santa Catarina and the brands Assim, Sim, Gato, Fluss, Sanifleur and Mat Inset to Flora Produtos de Higiene e Limpeza SA, a unit of J&F Participacoes SA, for 140 million reais ($80 million), according to a regulatory filing.

“With today’s sale, Hypermarcas has kicked off its widely expected divestment phase, aiming to simplify its too-extensive brand portfolio,” Juliana Rozenbaum, an analyst at Itau Unibanco Holding SA, wrote in a note to clients today.

“The decision is in line with our goal to focus in the pharmaceutical and personal hygiene segments, as well as the strategy to integrate and consolidate Hypermarcas operations after the acquisitions made since 2008,” Hypermarcas said in the statement.

Itau reiterated its “market perform” recommendation.

“Weak results ahead mean that volatility in this name is far from over,” Rozenbaum wrote. “Nonetheless, we believe that we are getting close to a turning point.”

J&F Participacoes is a holding company that indirectly controls beef producer JBS SA. JBS jumped 8.9 percent to 4.78 reais, the most since November 2009.

--Editors: Glenn Kalinoski, Brendan Walsh

To contact the reporter on this story: Telma Marotto in Sao Paulo at tmarotto1@bloomberg.net

To contact the editor responsible for this story: Helder Marinho at hmarinho@bloomberg.net


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