Inter (BIDI4;BIDI11): New corporate restructuring terms increase the company’s chances of listing in the US; stocks go up

The changes in the restructuring plan that should take Banco Inter (BIDI4;BIDI11) to Nasdaq, in New York, were subtle, but sufficient to reduce the risks of the operation, according to analysts. As with the first reorganization attempt, shareholders will have three options: receive US shares, BDRs (receipts for shares traded abroad) or opt for cash. The possibility of to withdraw it was precisely what prevented the restructuring from going ahead, in November last year.

As a result, in the session after the announcement of the new plan, the day is high for assets on the Brazilian stock exchange: BIDI4 shares rose 4.61%, at R$5.90, while BIDI11 units advanced 5.32%, at R$ 17.41, at 15:05 (Brasília time) this Monday (18).

The bank was willing to pay up to R$2 billion in cash to shareholders, but investor demand exceeded that limit. “The value of to withdraw it was fixed and as the bank’s shares had been falling a lot, the option became more interesting for shareholders”, explains Rafael Ragazi, partner and equity analyst at Nord Research.

Under the new terms, the amount was fixed at R$ 19.35 per unity (combination of one common share and two preferred shares) and the limit set at R$1.13 billion. If it is exceeded again, as occurred in the first attempt, the amount will be divided between the shareholders who opted for the to withdraw and the remainder will be paid in company BDRs. Only investors with a position in Inter on the 15th of April will be able to opt for the to withdraw.

“We believe that the new conditions for the restructuring favor the completion of the operation, although it has already been anticipated, in part, by the market”, say analysts Otavio Tanganelli, Gustavo Schroden and Eric Ito, from Bradesco BBI.

The team believes that the incentive for shareholders to opt for to withdraw are strong, even with the limit of R$ 1.13 billion, since the price set by unity in this option is 17% higher than the current one. For holders of BIDI4 (Inter preferred shares), the premium is 14%. Bradesco BBI has a recommendation overcome (performance above the market average) for BIDI11 and target price of R$34.

For Goldman Sachs, the possibility of apportioning the to withdraw with payment of residual values ​​in BDRs reduces the risk of structuring execution. “Still, we continue to see challenges for client monetization, both in Brazil and in the United States,” wrote the Goldman analysts. The bank assesses that the company is trading at high multiples and has a sell recommendation for BIDI4, with a target price of R$3.70.

Goldman Sachs also draws attention to the reduction in the value offered by Inter to shareholders who opt for the to withdraw. In the first attempt at corporate reorganization, the bank was willing to pay R$ 45.84 per unity and R$15.28 per preferred share (now, the value for BIDI4 has been set at R$6.45).

“This restructuring was already expected and we believe that the event should support the bank’s share prices”, assesses UBS.

At the end of the reorganization, shareholders who choose to keep the Inter shares will have Inter & Co shares, to be listed on Nasdaq, with two classes of shares: class A, with the right to 1 vote per share and class B. entitled to 10 votes and held only by controlling shareholders. Even though minority shareholders may only hold class A shares, the proportion of economic participation of the current corporate structure must be maintained in Inter & Co.

UBS has a buy recommendation for BIDI11, with a target price of BRL 46, a potential upside of 178% compared to last Thursday’s close. “The macroeconomic scenario (high inflation and moderate growth) is dampening loan growth and should delay the expected expansion of ROAE [retorno sobre patrimônio médio] of Inter”, evaluates the bank.

According to UBS’s calculations, the relationship between market value and book value of Inter estimated for 2022 is not very different from that of incumbent banks (the traditional ones). THE market value do Inter is currently traded below US$ 200 per customer, which is well below other Brazilian banks.

Ragazi, of Nord Research, believes that the conditions for the reorganization now depend more on bureaucratic issues, such as obtaining declarations for registration in the United States and commitments to financial institutions to finance the to withdraw. “Unlike the other time, it is no longer in the hands of shareholders. Those who intended to do arbitrage with the sole purpose of making money, will not prevent the reorganization from happening this time”, he concludes.

Shareholders will have six business days, starting from the company’s extraordinary general meeting, to opt for the to withdraw or the receipt of shares and BDRs of the company.

Purchase opportunity? XP Strategist Reveals 6 Cheap Stocks to Buy Today. Watch here.