Redecard SA (RDCD3), Brazil’s second-largest card-payment processor, rebounded from its biggest drop in a year after shareholders voted to get another appraisal of Itau Unibanco Holding SA (ITUB4)’s 11.8 billion-real ($5.8 billion) bid for the company.
Redecard advanced 1.8 percent to 30.60 reais at the close of trading in Sao Paulo, reversing an earlier decline of as much as 2.3 percent. The benchmark Bovespa index rose 3.8 percent.
The card-payment processor’s shares sank 6.4 percent on May 18 as 57 percent of its minority investors backed Lazard Asset Management LLC’s proposal to hire Credit Suisse Group AG (CSGN) to evaluate the offering, according to a regulatory filing. Itau offered 35 reais a share on Feb. 7 to take full ownership of Redecard and delist it less than five years after going public.
“We view further delays in the transaction as negative for Redecard, as it creates further distractions to management, and could imply further loss of market share in the following quarters,” Mario Pierry, an equity analyst at Deutsche Bank AG, wrote in a report to clients today. “Furthermore, if the deal does not go through, we see significant downside risk to Redecard’s earnings, given the misalignment of interest between Redecard and its controlling shareholder.”
Credit Suisse has 30 days to prepare the second appraisal, according to the regulatory filing.
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