Stone unimpressed by non-binding offers for Linx, sources say

Constellation Software

27/11/2024 19:37

By Luciana Magalhaes
       SAO PAULO, Nov 27 (Reuters) - Brazilian financial tech
firm StoneCo  STNE.O  has received multiple nonbinding offers
for its software unit Linx, but the bids so far are below what
it paid for the asset in 2020, according to three people
familiar with the negotiations.
    StoneCo, which is listed in New York, bought Linx for 6.7
billion reais ($1.14 billion) four years ago. 
    As of now, 20 potential bidders have signed non-disclosure
agreements to have access to information regarding the sale, two
of the people told Reuters. 
    The companies include Brazilian software firm Totvs SA
 TOTS3.SA  and Canada's Constellation Software  CSU.TO ,
according to the same sources.
    Of the 20, six firms have made non-binding offers, the
sources said.
    Totvs this week confirmed an ongoing process which may
result in a nonbinding proposal. The firm said it has not yet
made an offer to buy Linx.
    Constellation did not immediately reply to requests for
comment.
    StoneCo declined to comment.
    A person familiar with the bidding process said some offers
made so far were more than 50% lower than what StoneCo paid for
Linx four years ago. Another source said there were bids higher
than that, noting that StoneCo would probably not consider
selling Linx for much less than 5 billion reais.
    Reuters reported in September that Stone had hired
investment banks J.P. Morgan and Morgan Stanley to sell Linx. 
    The company later confirmed it had hired advisers to explore
options regarding its software business, without setting a
deadline for any kind of deal.
    Stone is in a comfortable financial position and has no
urgency to sell Linx, one of the people familiar with the talks
said.
    Earlier this month, StoneCo authorized a share repurchase
program of up to 2 billion reais. 

 (Reporting by Luciana Magalhaes; Editing by Chizu Nomiyama)
 ((Luciana.NovaesMagalhaes@thomsonreuters.com;))