De la mano de J.P. Morgan y Merrill Lynch & Co como underwriters, MercadoLibre Inc. (MercadoLibre.com), empresa en la cual E-Bay (EBAY) es accionista, comenzó el viernes pasado su proceso de IPO en el NASDAQ con miras a levantar hasta US$ 100 millones.
Comparto la siguiente nota que publicó DowJones en la que se plantea un muy interesante explicación de por qué empresas como Edenor y MercadoLibre.com (en breve MELI) deciden llevar su IPO a los Estados Unidos.
Taking advantage of strengthening market conditions for initial public offerings, Argentine online auction platform MercadoLibre Inc. announced last week its intention to raise $100 million through an offer of common shares on the Nasdaq stock exchange.
The MercadoLibre IPO follows that of Argentine power distributor Edenor SA (EDN), which went public in New York and Buenos Aires last month, and is part of a trend that has seen 69 companies go public so far this year in the U.S.
MercadoLibre’s IPO plans reflect international investor appetite for emerging market equities amid high liquidity and low interest rates. Yet its Wall Street- only listing strategy also shows the limits of the anemic local market.
“Argentine companies prefer to go public abroad because the Buenos Aires stock exchange lacks liquidity,” said Ruben Pascuali, a trader with Mayoral Bursatil, a brokerage in Buenos Aires.
Indeed, the average daily trading volumes on Argentina’s Merval market range between $20 million and $30 million.
This explains why Edenor offered 38% of its share capital in New York and a mere 10% in Buenos Aires in what was the first important initial public offering since 2000, analysts say.
The Argentine market wouldn’t have had the resources needed to carry an IPO the size of Edenor’s, which raised about $330 million and gave the company a market value of $770 million, Pascuali said.
“Furthermore, Argentine investors prefer to buy shares abroad as they still keep most of their savings outside of the country,” he said.
Nasdaq: A Natural Market For eBay’s Latin America Partner
Against this backdrop, and given MercadoLibre’s partnership with U.S. e-commerce giant eBay (EBAY), analysts say the Nasdaq represents a natural choice for MercadoLibre’s market debut.
In 2001, eBay became the Argentine startup’s major shareholder, with a 19.5% stake in a deal that saw MercadoLibre taking over eBay’s Brazilian unit, Ibazar.
By then, the company, which was founded in 1999 by Marcos Galperin, an Argentine graduate of Stanford University, had already been through two fundraising rounds. It had snagged as much as $54.1 million from a group of investors including JPMorgan Partners, Goldman Sachs (GS), GE Equity and Banco Santander Central Hispano (STD).
In its IPO prospectus, MercadoLibre said the agreement governing its strategic alliance with eBay expired on Sept. 24, posing the risk that eBay might become a competitor.
But the U.S.-based IPO appears to come with eBay’s full support, suggesting the U.S. company might not enter the Latin American market on its own.
“As a minority stakeholder and strategic partner of MercadoLibre, we are very excited and supportive of their IPO,” said eBay spokesman Hani Durzy. “eBay looks forward to continuing its relationship as a stakeholder and partner in the near future.”
Indeed, analysts believe eBay might actually use the IPO to increase its stake in MercadoLibre.
“Such an eBay move would make a lot of sense and would increase MercadoLibre’s market appeal,” said Francis Gaskins, president of Los Angeles-based research site IPOdesktop.com.
MercadoLibre said in its prospectus that it will use the IPO’s proceeds to repay eBay for an outstanding $9.1 million loan and to fund further expansion, including some acquisitions.
MercadoLibre has established a presence far outside of Argentina, reaching clients across South and Central America.
In 2006, its sales grew 84% to $52.1 million, with $1.1 million net profit. This was almost half of the $2.4 million it reported in the same period a year earlier, due to a fading tax credit. Operating income increased to $5.4 million from $800,000 the year earlier.
With these results, MercadoLibre is poised to have a successful IPO, said IPOdesktop’s Gaskins.
“It generates profit and top revenue growth and it’s a leader of its own market segment,” he said. “With these characteristics, the company is better off…going public in the U.S., where there’s more liquidity.”
Alejandro Salevsky Ezequiel Calviño Condensador de Flujo UCA Finanzas II MercadoLibre com Edenor IPO