Hypera signs leniency; market debates new multiple

Hypera signed a leniency agreement with CGU and AGU, a highly anticipated event that removes the greatest legal uncertainty that weighed on the company.

The leniency stems from the accusation that one of its executives gave money to politicians; in the end, investigations did not prove that the company received favors.

The owner of Engov, Benegrip and Maracugina has committed to pay around R$110 million and continue developing its Integrity Program, which will be monitored by CGU for a year and a half.

But, as already expected by the market, the founder of the company, João Alves de Queiroz Filho, known as “Júnior”, will fully bear the value of the agreement.

Junior owns 21.4% of the company and exercises de facto control through a shareholders’ agreement with Maiorem, the Mexican investor holding company that owns another 14.7%.

Hypera had been in talks with CGU and AGU for months.

“The discussion now is the multiple in which Hypera should trade now that international investors and even some local ones will be able to buy the paper again,” said one investor.

Today the stock trades at 13-14x 2023 earnings. At a meeting today with dozens of investors from buyside, analyst Luiz Guanais, from BTG, was asked about Hypera’s “fair multiple” after the leniency; for the analyst, the multiple can expand up to 20x.

In recent weeks, the market seemed to anticipate part of the announcement. With the stock market melting, the share went from R$30 to R$40.

In a statement just now, Hypera reiterated that “it did not benefit from the harmful acts practiced and in the negotiations for the leniency agreement, no damage was identified to the Treasury related to the facts.”

Hypera closed the day worth R$ 24 billion on B3.

Source: Brazil Journal