Brazil-JBS-Friboi big demand for shares in the company.
BRAZIL-JBS-SA RIDING ON THE CREST OF A WAVE.
JBS SA, the world’s biggest beef producer, jumped the most in three months in Sao Paulo trading after announcing plans to double its 2008 dividends, boosting investor confidence in the company’s finances.
Sao Paulo-based JBS surged 10 percent to 4.53 reais, the biggest gain since Nov. 26.
"The dividend increase was positive news, which shows they have a comfortable cash position," said Denise Messer, analyst at Brascan Corretora in Rio de Janeiro .
The Brazilian company that gave up last month on a plan to buy Kansas City-based National Beef Packing Co. said in a filing yesterday that it plans to double 2008 dividends to 102.3 million reais ($42.9 million) from a previously planned 51.1 million reais. The amount is six times more than what it paid in 2007, JBS said in the filing.
JBS dropped its $560 million purchase of National Beef after failing to allay U.S. Justice Department concerns that the company would control too much of the beef market, according to a statement posted on its Web site. Moody’s Investors Service said in September it may lower JBS’s rating if U.S. antitrust regulators approved pending acquisitions because the purchases would reduce its ability to generate cash to pay debts.
The company may also use its cash to make purchases of smaller rivals that are having difficulty financing their operations, Messer said in a phone interview.
"They won’t be making a purchase close in size to National Beef," she said. "These would be small Brazilian beef companies that are having trouble."
JBS, which said last month it may create 5,000 new jobs by increasing output at one of its Brazilian units, will listen to proposals from meatpackers that "fit our strategy and philosophy," Valor Economico newspaper reported last week, citing an interview with Jose Batista Jr., a company director based in the U.S.
Dropping beef prices and exports due to the global crisis forced closely held Independencia SA, a Brazilian beef processor, to seek bankruptcy protection from creditors in the U.S.. , Chief Financial Officer Tobias Bremer said in court papers filed Feb. 27. Brazilian beef exports have dropped about 34 percent by volume since Sept. 30, he said.
