JBS SA, the world’s largest beef producer, is underperforming peers in the bond market on concern a potential acquisition of Sara Lee Corp. will increase debt.
The company’s 8.25 percent bonds due in 2018 returned 0.7 percent since Dec. 20, compared with a 1.6 percent gain for similar-maturity issues from Marfrig Alimentos SA, South America’s second-biggest meat producer, data compiled by Bloomberg show. Brazilian corporate bonds gained 1 percent, according to JPMorgan Chase & Co.’s CEMBI index.
JBS is pursuing the U.S. food company after announcing or completing 14 acquisitions since 2007 for $19.1 billion. Those deals pushed the Sao Paulo-based company’s net leverage up almost four-fold to $8.3 billion in the third quarter from a year earlier, according to company filings. Sara Lee, with a market value of $11 billion, is an expensive purchase, said Bevan Rosenbloom, an analyst at RBS Securities Inc. in Stamford, Connecticut.
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