September 16, 2019 / 11:44 PM / a month ago

Brazil homebuilder MRV puts temporary hold on purchase of U.S. firm

SAO PAULO/RIO DE JANEIRO (Reuters) - The board of Brazil’s MRV Engenharia e Participacoes SA (MRVE3.SA), Latin America’s largest homebuilder, has temporarily interrupted the purchase of Florida-based AHS Residential LLC, it said on Monday, saying it will first hear shareholders’ concerns.

In a securities filing, the company said its board still recommends the purchase of a controlling stake in AHS for $220 million to $255 million.

Although analysts have generally said the transaction could help diversify MRV away from government-subsidized housing in Brazil, they have said it does not bring clear synergies. They have also flagged governance issues, as AHS is currently owned by MRV Chairman Rubens Menin, who also holds a 32.5% stake in the Brazilian company.

Brazil-listed common shares in MRV have fallen roughly 8% since the transaction was announced earlier in September.

In the filing, MRV said it was giving shareholders until Sept. 24 to formally raise concerns about the deal.

Reporting by Aluísio Alves and Gram Slattery; Editing by Leslie Adler

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