Mubadala Capital — the asset manager private equity linked to the Abu Dhabi sovereign wealth fund — is proposing to remove Zamp from the Novo Mercado.
In a letter sent to the boardMubadala said that the movement seeks to expand alternative funding of the owner of Burger King Brasil and Popeyes amid its high leverage.
Over the last four months, Mubadala increased its stake from 5% to 30%, becoming the company’s largest shareholder.
The second largest investor is Fit Participações — the family office former bankers Tom Freitas Valle and Fernando Prado — with 20%; followed by Restaurant Brands International, with 10%, and Mar Asset, with around 5%.
Mubadala’s proposal was sent this evening to Zamp’s board, which has one week to call a shareholders’ meeting to vote on the matter. For it to be approved, a simple majority of those present at the EGM is required.
Mubadala said in the letter that its objective with the proposal is to expand the company’s range of financing alternatives. Outside the Novo Mercado, Zamp could, for example, make a follow-on with the issuance of preferred shares, which would make it easier to approve the shareholder base — including Mubadala — as their voting power would not be diluted.
According to Mubadala, other possible alternatives with the movement include business combinations with a company in the sector that is not listed on the Novo Mercado; and the migration of Zamp shares to stock exchanges in other countries.
The justifications for the exit caught the market’s attention, with some investors speculating whether these were the real reasons behind the movement.
One of the theories is that the proposal could be a Mubadala strategy to pressure action, with the prospect of a follow-on.
“They couldn’t do any of these three funding and M&A moves without having control of the company,” said one investor. “It seems to me that they may be doing this and then making an OPA for 100% of the capital.”
On the Novo Mercado, if someone makes an OPA for 100% of the capital but not all shareholders join, the OPA is cancelled. Outside the Novo Mercado, it happens anyway.
It would not be Mubadala’s first takeover bid for Zamp. In the middle of last year, the manager made a takeover bid to buy control of the company, offering R$8.33 per share. Today, the stock trades at R$6.27.
The offer ended up not going ahead due to a veto by RBI, which owns the brands and holds the master-franchise contract with the Brazilian operation.
According to a source, some minority shareholders, including international funds that are shareholders of RBI, pressured the RBI to take a stance against the OPA, which was perceived as bad for Zamp’s minority shareholders — since, if there was 100% adherence, each shareholder could only sell half of Your participation.
There was also a contractual problem: a clause in the master franchise agreement prohibits the controller from competing with RBI. (Mubadala had a stake in a company that operates dark kitchens for Wendy’s in the US).
As part of the proposal, Mubadala said it wants to include in the company’s bylaws some rules that are required by Novo Mercado.
The manager proposed maintaining, for example, the tag along 100% for minority shareholders (both ONs and PNs); the requirement to have at least two independent directors in the board; and the board’s competence to prepare and publish an opinion on any public takeover offer (OPA).
In practice, Mubadala’s proposal sheds light on a dispute of views regarding the company’s strategy. While Mubadala believes that Zamp should accelerate its growth, opening 70 to 80 stores per year over the next three years, to close the gap with McDonald’s, some shareholders believe the company should reduce its capex and start using part of your cash generation to distribute dividends.
In a recent interview with Brazil Journal, CEO Ariel Grunkraut expressed this view, saying that the company was considering increasing shareholder remuneration, with buybacks or dividends.
Pedro Arbex
