J&F ends Brazil’s Alpargatas sale talks over price, source says

SAO PAULO: J&F Investimentos SA has ended talks to sell a controlling stake in Havaianas flip flop maker Alpargatas SA to the investment firms of Brazil’s most prominent banking clans because of differences over price, a person with direct knowledge of the matter said on Sunday.

According to the person, J&F shunned pressure from Cambuhy Investimentos Ltda and Itaúsa Investimentos SA to lower the asking price for an 86 per cent stake in Alpargatas as the end of an exclusivity period for talks approached on Sunday. The person declined to elaborate on the size of the price gap.

Reuters reported earlier in the day that Cambuhy and Itaúsa had offered 3.3 billion reais to 3.5 billion reais (US$1 billion to US$1.1 billion) for Alpargatas.

Cambuhy, Itaúsa and Bradesco did not comment. J&F did not have an immediate comment.

J&F, which oversees the fortune of the billionaire Batista family, must raise cash to pay a 10.3 billion real leniency fine and refinance looming loan maturities, the report said.

Brothers and J&F’s owners Joesley and Wesley Batista signed a leniency deal in May after admitting to bribing almost 1,900 politicians.

The Batistas will resume the process to sell Alpargatas in the form of a competitive auction “as soon as possible,” said the person, who requested anonymity because of the sensitivity of the matter.

J&F hired Banco Bradesco BBI as an advisor on the sale.

Common shares of São Paulobased Alpargatas have rallied 35 per cent over the past three months, on speculation the Batistas would put the valuable fashion branding company and leisure clothing maker up for sale. The stock is up 63 per cent this year. — Reuters