PPVRA
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Texan Group Interested In Buying Stake In RG

Wed May 04, 2005 2:31 am

Tuesday May 3, 8:37 AM EDT


SAO PAULO -(Dow Jones)- The U.S.-based Texas Pacific Group (TPG.XX) is looking at a possible purchase of Brazil's largest airline, Viacao Aerea Riograndense SA (VAGV4.BR), or Varig, local newspaper O Estado de Sao Paulo reported in its Tuesday editions.

The U.S. group has begun an analysis of Varig's financial situation in a process that could extend over 90 days, the newspaper said.

Meanwhile, Varig itself - burdened by huge debts - is analyzing several other acquisition proposals, according to local reports.

Two Brazilian entrepreneurs, Nelson Tanure and German Efromovich, have separately expressed an interest in buying Varig. According to market analysts, Brazil's Planner Group, a Portuguese investment group and a Swiss group have also submitted offers.

If the Texas Pacific Group were to buy a stake in Varig, it would need a Brazilian partner. Under current laws, Brazilian airlines can't be controlled by overseas owners.

http://money.iwon.com/jsp/nw/nwdt_rt...=20050503&alias=/alias/money/cm/nw

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So now we know 2 other potential investors, the Texan group and the unnamed Swiss group.

Rumors are that a final decision is expected by this Saturday. IMO, German Efromovich will take the airline, but we'll see...

PPVRA
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DLPMMM
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RE: Texan Group Interested In Buying Stake In RG

Wed May 04, 2005 3:20 am

The return of Texas Pacific?

Were they not the ones who bought CO years ago? Do they still have an equity stake in CO?

This could be interesting if it happens.
 
MGA
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Joined: Wed Mar 02, 2005 4:58 am

RE: Texan Group Interested In Buying Stake In RG

Wed May 04, 2005 3:53 am

Texas Pacific Group just bought half of Neiman Marcus. 5.1 Billion in CASH!!... Kind of odd that they would be submitting offers for a South American Carrier...

Here is the Link to the Article About Neiman Marcus

www.suntimes.com/output/business/cst-fin-neiman03.html

MGA
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PPVRA
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RE: Texan Group Interested In Buying Stake In RG

Wed May 04, 2005 12:02 pm

Quoting DLPMMM (Reply 1):
Were they not the ones who bought CO years ago? Do they still have an equity stake in CO?

Anyone knows the answer for this? If true, that would make things very interesting...

Cheers,
PPVRA
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
EddieDude
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RE: Texan Group Interested In Buying Stake In RG

Wed May 04, 2005 12:15 pm

Quoting PPVRA (Reply 3):
Anyone knows the answer for this? If true, that would make things very interesting...

I have no idea (and to be perfectly honest, I am too lazy to check CO's SEC filings to see who their main shareholders are) but the answer is likely no (or not in a substantial proportion). The nature of private equity (also called venture capital) investors like Texas Pacific is that they make an investment that is intended from the beginning to last only a certain term (in Spanish that term is referred to as investment horizon in the private equity slang... dunno in English). The idea is that the fund will cash out its investment (private equity investments are made hoping that returns will be geometric, hence the name venture capital) through the sale of the portfolio company (in this case CO) whether to another fund (a secondary p.e. investment), or to a strategic investor, or to the public via an IPO (other more complex alternatives can be considered in special circumstances like a redemption of shares and massive profit distribution, etc.). Since CO is publicly-traded (well, its parent company is), my best guess is that Texas Pacific sold all or most of its interest in CO (in CO's parent company) by selling its shares in the market. Therefore, I would venture to suggest that Texas Pacific no longer owns any shares of CO, or it owns a non-significant portion that is merely considered an asset management investment.

Of course I could be wrong.
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jdaniel001
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RE: Texan Group Interested In Buying Stake In RG

Wed May 04, 2005 2:47 pm

Also, they had an offer out for Air Canada. And they had some dealings with America West.
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