Lupatech Jumps on Speculation of Odebrecht Takeover

Lupatech Jumps on Speculation of Odebrecht Takeover

Lupatech SA, a Brazilian provider of
oil equipment and services, rose to the highest in more than two
months on speculation it has become a takeover target.
Lupatech, based in Caxias do Sul, Brazil, jumped 6.9
percent to 5.56 reais at 12:52 p.m. in Sao Paulo. Earlier it
climbed to 5.68 reais, the highest since Dec. 5.
Odebrecht SA, a Brazilian construction and chemicals
conglomerate that also makes oil platforms, is considering
buying Lupatech, Estado de S. Paulo columnist Sonia Racy said on
the newspaper’s website today, without saying where she got the
information.
Brazilian development bank BNDES and pension fund Petros
last year agreed to buy a combined 300 million reais ($175
million) of Lupatech stock as part of a 700 million-real offer.
Lupatech, which has posted losses every quarter since the
beginning of 2010, is shifting its focus to oil exploration
after bets that a production boom would stoke demand for its
ropes and valves failed to materialize.
“They don’t have liquidity and they are very leveraged,”
Erick Hood, an analyst at SLW Corretora brokerage, said by
telephone from Sao Paulo. “Nothing is stopping other companies
from making an offer, I think that would be viable.”
Lupatech declined to comment in an e-mailed response to
questions. Officials at Odebrecht’s press office didn’t
immediately return telephone calls from Bg News.