SAO PAULO, June 13 Fibria SA and two
other pulp producers have hired banks to bid for rival Eldorado
Brasil Celulose SA, which may go on the block after the family
that controls it entered a plea deal in Brazil, Valor Econômico
newspaper reported on Tuesday.
According to Valor, which did not specify how it got the
information, Chile's Parque Arauco SA has hired Banco
Santander SA to work on a proposal, while Morgan
Stanley & Co is advising Fibria, the world's No. 1
Another potential contender is Suzano Papel & Celulose SA
, which is said to have hired two unidentified large
Brazilian investment banks to analyze a bid, Valor said. Two
bankers told Valor under condition of anonymity that Eldorado's
equity could be worth between 3 billion reais and 4 billion
reais ($904 million and $1.2 billion).
With debt hovering at 8 billion reais, Eldorado could soon
be put up for sale after two key members of Brazil's Batista
family were ensnared in a corruption scandal, sources have told
Reuters in recent weeks. Eldorado lenders are pressing for a
sale of the company, Valor noted.
J&F Investimentos SA, the company overseeing the business of
the Batistas, has 81 percent of Eldorado. The remaining 19
percent is owned by Brazilian pension funds, Petros Fundação
and Funcef Fundação dos Economiarios,
and special purpose vehicle FIP Olímpia.
There were no immediate comments by São Paulo-based J&F,
Fibria, Suzano or the banks. The media office of Santiago-based
Arauco did not answer early calls seeking comment.
Last October, J&F started talks to buy out the stakes that
both Petros and Funcef have in Eldorado.
Both Joesley and Wesley Batista, the family members that
last month entered the plea deal with Brazilian prosecutors,
want to speak to bidders of Eldorado first before hiring an
advisor for a sale, Valor said, citing banking executives with
knowledge of the matter.
Fibria seems the most unlikely suitor because a key
shareholder, state development bank BNDES, is
unlikely to approve a transaction that could shore up the
Batistas, Valor said, without saying how it got the information.
In their plea bargain, both Batistas ensnared President
Michel Temer in a corruption scandal, unleashing retaliatory
actions from his government against the group.
($1 = 3.3176 reais)
(Reporting by Guillermo Parra-Bernal; Editing by Bernadette