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IRB Brasil Re prices IPO: Report

28th July 2017 - Author: Steve Evans

Brazilian reinsurance firm IRB Brasil Resseguros S.A. (IRB Brasil Re) has priced its initial public offering, according to a report from Reuters, with the value and volume snapped up falling below expectations.

Brazil mapThe IPO pricing puts shares at 27.24 reais (US $8.64) a share on Thursday, data from the Brazilian Securities Commission shows, which is at the lower end of the expected pricing range.

The IPO saw IRB Brasil Re’s existing shareholders offloading a portion of their stake in order to raise capital and bring new investors onboard, as the reinsurance firm looks to expansion.

The IPO involved a secondary public offering of IRB Brasil Re shares by major holders, including Itaú Unibanco Holding S.A. units Itaú Seguros S.A. and Itaú Vida e Previdência S.A., BB Seguridade Participações S.A. and Banco Bradesco S.A.

The IPO looks to have raised just over 2 billion reais, as a reported 73.5 million shares are to be sold by IRB Brasil Re’s major holders.

The pricing of the IPO had a range of up to 33.65 reais per share.

Just this week rumours have been flying about Warren Buffett’s Berkshire Hathaway taking a stake in IRB Brasil Re, it’s unknown whether Berkshire has bought any of the stock but a number of analysts have been less than receptive to that idea, given Buffett’s commentary on reinsurance in recent years.

Banco Bradesco SA’s investment banking unit underwrote the IPO alongside JP Morgan, BTG Pactual and Banco do Brasil.

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