Major Brazilian meat processor JBS is to spin off and sell shares in its Vigor Alimentos dairy unit.
Under the plan, current shareholders of the São Paulo-based company will have the right to swap JBS stock to “proportionally obtain” a stake in Vigor, as a new public company. Alternatively, shareholders can retain their JBS shares, the company said.
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JBS said it plans to list Vigor, one of Brazil’s largest yoghurt and cheese makers, on the São Paulo Stock Exchange.
“The management of JBS believes that, because Vigor is a wholly-owned subsidiary of the company and not an independent company, the market may not perceive the real value of Vigor within the company’s assets,” JBS said in a stock exchange filing. “In addition, the dairy industry customarily has higher trading multiples than those of the meat processing industry. For these reasons, the company believes that the exchange offer will add value to all of its shareholders.”
The Vigor spin-off will require consent from the bondholders, JBS said. Following approval, Vigor will have its own independent corporate structure. The board of directors will comprise of seven members, of which five will be independent.
Last month, JBS was reported to be in talks to buy vegetable producer Goiás Verde. JBS denied the reports.
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