Multiplan’s R$2 Billion Buyback Plan Set to Increase All Shareholder Stakes

Multiplan, a leading Brazilian shopping center operator, is undergoing a significant change in its shareholder structure. The company’s investors recently approved a major share buyback plan.

This decision came after the Ontario Teacher’s Pension Plan (OTPP) announced its intention to sell its entire stake in Multiplan. The OTPP has been a long-standing investor in Multiplan, holding shares for 18 years.

Earlier this year, the Canadian fund decided to divest its remaining 111.2 million shares. This move followed the fund’s previous sale of half its stake just two months prior.

Multiplan’s founder, José Isaac Peres, stepped in to purchase 21.2 million shares from the OTPP. This acquisition increased Peres’ ownership from 26.2% to 35.37% of the company. The remaining 90 million shares were offered to Multiplan for repurchase.

In a shareholder meeting, 99.9% of votes favored the buyback plan. Multiplan will pay R$22.21 per share, totaling approximately R$2 billion ($357.14 million).

This price represents a 16.2% discount compared to the average stock price over the previous 30 trading days. The buyback deal offers several benefits to Multiplan‘s existing shareholders.

Their ownership stakes will automatically increase by 18.4% without any additional investment. This increase excludes Treasury shares held before and after the transaction.

Multiplan’s Share Repurchase

Multiplan’s share repurchase also implies a significant discount on the company’s real estate portfolio. The deal values the properties at a 57.8% discount to their fair market value.

This valuation results in an implied capitalization rate of 13%, one of the highest since Multiplan’s initial public offering in 2007.

The company plans to finance this large-scale buyback through a combination of its own resources and third-party funding.

Despite the substantial cash outlay, Multiplan has assured investors that it will maintain its current dividend distribution policy. Market analysts have responded positively to this development.

BTG Pactual, a prominent investment bank, has maintained a “buy” recommendation for Multiplan’s stock. They cite the company’s robust capital structure as a key factor in their assessment.

This transaction marks a pivotal moment in Multiplan’s corporate history. It signals the end of OTPP’s long-term investment, which began in 2006.

Since Multiplan’s IPO in 2007, its shares have appreciated by 221%, outperforming Brazil’s Ibovespa index, which rose 145% during the same period.

The buyback deal demonstrates Multiplan’s confidence in its long-term prospects. It also reflects the company’s commitment to enhancing shareholder value.

As Multiplan enters this new phase, investors and market watchers will closely monitor its performance and strategic direction in Brazil’s competitive shopping center industry.

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