Bloomberg News

Lan Airlines, Tam Climb as Swap Deadline Looms: Santiago Mover

June 21, 2012

Lan Airlines SA (LAN) and Tam SA (TAMM4) rose as investors bet a share swap that will result in the creation of Latam Airlines Group SA will succeed.

Santiago-based Lan, Latin America’s largest carrier by market value, rose 1.1 percent to 13,642 pesos at the close in Santiago, its fifth day of gains. Tam, Brazil’s biggest airline, advanced 9.2 percent to a five-year high of 52.50 reais.

“The deadline of the offer to swap shares is close, and we haven’t seen announcements of people backing from the offer,” Jorge Sepulveda, an analyst at Santiago-based brokerage Euroamerica Corredores de Bolsa SA, said by phone. “Investors seem sure it will be successful.”

Lan said on June 12 it would extend for 10 days its offer for investors to tender their Tam shares in Brazil for shares in Latam Airlines, after 94.4 percent of Tam’s stockholders approved the deal. Lan had initially set a minimum 95 percent threshold for the deal to be completed.

Three days after the deal is closed, Tam holders will receive depositary shares in Latam Airlines Group SA, the company formed by the merger, which would be the world’s most valuable carrier with a leading position in Brazil.

Santiago-based Inversiones Security set the equivalent of a buy recommendation for the combined carrier, citing merger synergies and growth potential in Latin America.

To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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