Notes

Retailer Magazine Luiza set Tuesday evening the price of R$43 per share in its new stock offering, for a total of R$4.7 billion. The amount made the year have a record volume of equity sales. Adding up IPOs and follow-on offerings, it’s R$76.1 billion, topping the record of 2007 in nominal terms.

Magazine Luiza’s offering was mostly primary, with the company getting the majority of the proceeds — R$4.3 billion, which will boost its online marketplace, add financial services to merchants, invest in technology, distribution and acquisitions. The retailer becomes capitalized to accelerate its business strategy and get a leg up on the competition — such as B2W, Mercado Libre and Amazon.

The offering’s additional tranche was partially exercised, since the largest shareholders decided to reduce their share of the sale. They could sell up to R$860 million, but opted to sell R$400 million at the set price.

The price defined in the offering was very close to Tuesday’s closing price, of R$43.40, as the share lost 3.6% to adjust to the value that investors were asking in the bookbuilding, and accompanying the overall market’s decline. The price represents a discount on the share value when the offering was launched — at that moment, it was trading at R$44.02. The offering was led by Itaú BBA and coordinated by seven other banks — BTG Pactual, Bank of America, J.P. Morgan, BB Banco de Investimento, Bradesco BBI, Morgan Stanley and Santander.

One source says the offering was twice oversubscribed. Some big Brazilian asset managers that already hold the share opted to stay out, for considering its multiples high — but there was strong demand of foreigners.

Until early November, the Brazilian market had R$71.4 billion in stock offerings this year, behind only 2007, year IPOs become popular, with R$75.5 billion raised, according to data of the Brazilian Financial and Capital Markets Association (Anbima). The trade group doesn’t consider the total of 2010 because of the atypical R$120 billion Petrobras offering — mostly absorbed by the government, as part of the transfer-of-rights agreement that gave the oil producer right to explore pre-salt reserves.