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The actions of Locate (RENT3) what if United (LCAM3) function with a high stratospheric this Wednesday (23), in view of the announcement of their possible union. At 1:01 p.m., the increases were 13.07% and 19.82% respectively, while the Ibovespa fell 0.91%.
But, if you’ve embarked on this euphoria, one piece of advice: jump in now. At least that’s what Safra Bank recommended to your customers.
In a report signed by Luiz Peçanha, the bank praises the intention of the two largest car rental companies in the country to join forces, but does not hide its skepticism with the conclusion of the agreement. The reason is obvious: the resulting market concentration can lead to Cade (Administrative Council for Economic Defense) to veto the agreement partially or totally.
Worrying concentration
Safra notes that, in its pure form, the incorporation of United by Localiza create a company with a 65% market share. Therefore, the risk of Cade imposing restrictions on approving the transaction or simply rejecting it entirely cannot be ignored, according to the bank.
“Despite our positive assessment of the transaction, which may improve United’s current value, it still depends on Cade’s approval,” says Safra.
“And the non-approval of the agreement, which seems reasonable, considering the effect, on the rates [de locação], caused by the high market concentration of the new company, would have a negative impact on the actions of the two companies in the future ”, he says.
No high space
In anticipation of the increase in Localiza and Unidas shares in today’s trading session, Safra went against common sense and downgraded the recommendation for top performance roles (expected performance above the market average) to neutral.
This is because, according to Peçanha, the rise in shares will leave little room for further appreciation, given companies’ current target prices. For Localiza, Safra’s target price is R $ 59.5. For United, R $ 21.
To give you an idea, at 1:01 pm, with the rebound in both shares, Localiza was already very close to the target price, trading at R $ 58.50; and United was well above the fair estimate by Safra, priced at R $ 25.39.
See Localiza’s statement on the deal.
