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Liquigás bidding due today: Reuters
Posted on Tuesday, 11 June 2019 10:01
Petróleo Brasileiro (Petrobras) is due to receive non-binding proposals for Liquigás Distribuidora today after pushing back the deadline for expressions of interest from 6th June, Reuters reported.
The divestment process dates to 2016, when the Brazilian integrated oil and gas powerhouse entered into an agreement to hand over the liquified petroleum gasoline (LPG) business to Companhia Ultragaz as part of debt reduction programme.
However, in February 2018, the court of the Administrative Council of Economic Defence (CADE) evaluated and, by the majority of its members, rejected the sale proposal.
Undaunted, Petrobras has since been weighing alternatives for the divestment in line with strategic plans to improve its overall business portfolio by withdrawing entirely from the LPG distribution arena.
The group launched a Liquigás sales teaser in the first quarter ended 31st March 2019 that contained restrictions to companies already participating in the market for the distribution of bottled natural gas and tanks.
In order to avoid another rejection by CADE, players with a market share of more than 10.0 per cent can only bid via a consortium and cannot acquire a share corresponding to over 30.0 per cent of the LPG’s current sales volume individually.
Sources close to the matter have told Reuters that private equity houses will by vying with sovereign wealth funds, local investment firms and domestic LPG distributors to acquire the number one player in the bottled segment.
They noted Advent International and Warburg Pincus are expected to take part individually in the first round of bidding, at least, while CVC Capital intends to table an offer as part of a consortium with an undisclosed strategic partner.
Itausa Investimentos Itau is currently in discussions with Copagaz on a joint proposal that could be up against ones from Mubadala Investment or Aygaz of Turkey.
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