UPDATE 1-Chile's Copec, Eldorado end takeover talks, sources say
(Adds details, comments throughout)
By Guillermo Parra-Bernal and Tatiana BautzerSAO PAULO, Aug 4 (Reuters) - Chilean pulpmaker Empresas
Copec SA's <COP.SN> talks to buy Brazilian rival Eldorado Brasil
Celulose SA from parent J&F Investimentos SA have collapsed
because the two sides failed to agree on a price, four people
with direct knowledge of the matter said on Friday.
Copec's Arauco unit remains interested in Eldorado, said two
of the people, who requested anonymity to discuss the matter
freely. Arauco's exclusivity period ended early on Friday, with
the company failing to win improved terms and a smaller price
tag for the purchase, the people said.
Arauco now faces competing bids for the pulpmaker, the same
people said. Eldorado's enterprise value, which includes cash,
market capitalization, debt and minority interests, is slightly
above 10 billion reais ($3.2 billion), they added.
According to one of the people, Eldorado is also a target of
an unnamed Asian company and Brazilian rival Fibria SA
<FIBR3.SA>, which sees potentially significant cost savings from
an acquisition. Arauco declined to comment, while the other
companies did not have an immediate comment.
Brazil's billionaire Batista family controls 81 percent of
Eldorado through J&F, with the two pension funds owning the
rest. J&F controls the Batistas' stake in meatpacking giant JBS
SA <JBSS3.SA> and companies in the home cleaning, banking and
Eldorado's debt hovers around 8 billion reais, and J&F's
lenders are pressing for a sale, sources told Reuters in
Eldorado is among the flagship assets J&F put up for sale
after agreeing to pay a record-setting 10.3 billion-real fine
for the Batista family's role in corruption scandals that have
hurt President Michel Temer's administration.
Shares of Santiago-based Copec rose 1.1 percent to 7,884
Chilean pesos on Friday. Fibria, the world's No. 1 eucalyptus
pulp producer, was up 2.5 percent at 34.60 reais in São Paulo.
Buying Eldorado could allow Copec to expand in Brazil, where
lawmakers have discussed easing sales of land to foreign
investors. Land in Brazil offers global pulpmakers advantages,
such as more-productive soil than Scandinavia and Chile.
($1 = 3.1183 reais)
(Reporting by Guillermo Parra-Bernal and Tatiana Bautzer;
Additional reporting by Antonio de la Jara in Santiago)
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Keywords: ELDORADO BRASIL M&A/EMPRESAS COPEC (UPDATE 1)