Bloomberg News

Lupatech Jumps on Speculation of Odebrecht Takeover: Rio Mover

February 18, 2012

Feb. 17 (Bloomberg) -- Lupatech SA, a Brazilian provider of oil equipment and services, rose to the highest in more than two months on speculation it has become a takeover target.

Lupatech, based in Caxias do Sul, Brazil, jumped 6.9 percent to 5.56 reais at 12:52 p.m. in Sao Paulo. Earlier it climbed to 5.68 reais, the highest since Dec. 5.

Odebrecht SA, a Brazilian construction and chemicals conglomerate that also makes oil platforms, is considering buying Lupatech, Estado de S. Paulo columnist Sonia Racy said on the newspaper’s website today, without saying where she got the information.

Brazilian development bank BNDES and pension fund Petros last year agreed to buy a combined 300 million reais ($175 million) of Lupatech stock as part of a 700 million-real offer. Lupatech, which has posted losses every quarter since the beginning of 2010, is shifting its focus to oil exploration after bets that a production boom would stoke demand for its ropes and valves failed to materialize.

“They don’t have liquidity and they are very leveraged,” Erick Hood, an analyst at SLW Corretora brokerage, said by telephone from Sao Paulo. “Nothing is stopping other companies from making an offer, I think that would be viable.”

Lupatech declined to comment in an e-mailed response to questions. Officials at Odebrecht’s press office didn’t immediately return telephone calls from Bloomberg News.

--With assistance from Katerina Petroff in Sao Paulo. Editors: Carlos Caminada, Jasmina Kelemen

To contact the reporter on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net


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