Experian buys more of Brazilian firm -UPDATE

Information services firm Experian said it has bought almost all of Brazil's leading personal credit checker that it doesn't already own.

Information services firm Experian said it has bought almost all of Brazil's leading personal credit checker that it doesn't already own.

The company already owned a 70% stake in Serasa and has now agreed to acquire a further 29.6% interest, taking its holding to 99.6%.

It is paying a group of banks the equivalent of $1.5bn but did not say why it has not bought the other 0.4%.

The deal requires the approval of Experian shareholders as well as the thumbs up from the Brazilian authorities.

Experian's Chief Executive Officer, Don Robert, said Serasa had given his firm a beachhead from which to expand further in Latin America.

"We see significant potential for future growth in Brazil, and we are delighted to have the opportunity to further invest in this exciting region," he said.

Serasa is one of the largest credit bureaux in the world and is the market leader in Brazil, with approximately 60% market share.

Analysts at Seymour Pierce were unswayed by the news, sticking to their previous recommendation to clients to reduce their holdings of the company at current share price levels.

"The acquisition is expected to be earnings enhancing in the year ending March 2013 and thereafter," they said in a note.

"Management had previously suggested they were inclined to exercise the put, therefore today's news was not unexpected and does not change our fundamental view of the company.

"We continue to believe the shares are overvalued trading on an estimated 2013 fiscal year prospective price-to-earnings multiple of 19.5x.

We reiterate our reduce recommendation with a 1,000p target price."

Recommended

A new legal headache for Haleon
Stocks and shares

A new legal headache for Haleon

Haleon, GSK’s former consumer-products arm, spun off last month, has made a dismal debut on the stockmarket.
17 Aug 2022
Persimmon yields 12.3%, but can you trust it to deliver?
Share tips

Persimmon yields 12.3%, but can you trust it to deliver?

With a dividend yield of 12.3%, Persimmon looks like a highly attractive prospect for income investors. But that sort of yield can also indicate compa…
17 Aug 2022
Cineworld faces a bleak future – investors should stay away
Share tips

Cineworld faces a bleak future – investors should stay away

Weighed down by crippling debts and with consumers tightening their belts, Cineworld's future does not look bright, says Rupert Hargreaves. Investors …
17 Aug 2022
Britain’s ten most-hated shares – w/e 12 August
Stocks and shares

Britain’s ten most-hated shares – w/e 12 August

Rupert Hargreaves looks at Britain's ten most-hated shares, and what short-sellers are looking at now.
16 Aug 2022

Most Popular

Don’t listen to the doom-mongers – the future is bright
Economy

Don’t listen to the doom-mongers – the future is bright

With volatile markets, raging inflation and industrial unrest, it may feel like things are bad and likely to get worse. But the end of the world is no…
15 Aug 2022
Investors should get ready for a political revolution
UK Economy

Investors should get ready for a political revolution

Liz Truss will beat Rishi Sunak, cut taxes, and then shake up the Bank of England, says Helen Thomas
15 Aug 2022
How solar panels could lower your energy bill
Energy

How solar panels could lower your energy bill

Solar-panel installation firms are reporting a four-fold increase in orders this year compared with 2021. Ruth Jackson-Kirby explains how solar can he…
14 Aug 2022