JBS minority shareholders approve dual US-Brazil listing

By Luciana Magalhaes and Ana Mano

SAO PAULO (Reuters) -Brazilian meatpacker JBS on Friday secured shareholder support for a long-planned dual listing of shares in both the United States and Brazil, boosting shares as analysts calculated a higher valuation in line with global peers.

Minority shareholders at a Friday assembly in Sao Paulo delivered enough votes to approve the dual listing, according to a securities filing. On Thursday, the company said a preliminary count showed about 52% of remote votes were against the plan, raising doubts about its chances.

JBS shares rose 2% on the news, capping a 37% rally since mid-March as the proposal cleared several hurdles.

Plans for a U.S. listing were delayed repeatedly over the past decade, hindered by corruption scandals involving the company’s top shareholders, brothers Joesley and Wesley Batista, as well as concerns about its environmental impacts and the transparency of its climate targets.

Since the U.S. Securities and Exchange Commission gave its approval for the New York listing in late April, environmental groups and U.S. politicians have aired concerns.

Analysts and proxy advisory firms had debated the merits of the company’s dual listing proposal.

Some advisory firms warned that a new dual-class share structure was likely to reduce the voting power of minority shareholders, but analysts touted the chance to bring its valuation in line with international peers.

Igor Guedes, an analyst at Genial Investimentos, said the dual listing would bring JBS stock valuation closer to peers such as Tyson Foods (NYSE:TSN), a major U.S. rival.

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He forecast JBS’s enterprise value could rise to 7.5 times its earnings before interest, taxes, depreciation and amortization (EBITDA), compared to 5.8x currently, implying a potential appreciation of 29.3% for its shares.

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