(Adds information from securities filing on deal endorsement)
SAO PAULO, July 8 (Reuters) - The board of Brazilian for-profit education company Estácio Participações SA on Friday endorsed a takeover bid by larger rival Kroton Educacional SA, a securities filing showed.
Earlier on Friday two sources with direct knowledge of the matter told Reuters the Estácio board had agreed to Kroton terms and was ready to advise shareholders to approve the offer.
The filing said the boards of both companies would schedule shareholder assemblies to recommend approval of Kroton’s proposal.
Estácio said on July 1 its board had accepted an improved takeover bid from Kroton worth 5.5 billion reais ($1.7 billion).
Kroton, the world’s largest education company by market value, offered a swap ratio of 1.281-to-1 for Estácio’s shares as well as a one-off cash payment of 170 million reais ($52.84 million), equivalent to roughly 0.55 reais per Estacio share.
The deal could unleash a wave of mergers in Brazil’s education industry, underscoring the resilience of for-profit college operators during a two-year recession that saw rising student delinquencies and slashed government funding for student loans.
Grupo BTG Pactual advised Estacio’s board and the investment banking unit of Itaú Unibanco Holding SA advised Kroton in the deal. (Reporting by Tatiana Bautzer and Marcelo Teixeira; Editing by Sandra Maler and Clarence Fernandez)