Real estate developer merger announced
Brazilian real estate developers Brascan Residential Properties and Company have announced details of a merger.
The deal is set to see the partnership develop into the third largest real estate developing company in the country.
According to Bloomberg, shares in Company fell by 14 per cent yeasterday, which was the biggest drop since it started trading in 2006.
The two real estate companies all trade in a section of the Sao Paulo exhange called the Novo Mercado, which has strict corporate governance rules to protect minority shareholders.
Nicholas Reade, Brascan’s chief executive officer, told the news agency: "The market is not understanding the existing potential of the Brascan shares that Company shareholders will receive.
"What should count is not the market value of the companies but the relative value of both companies looking at the value of the new company in the future."
Jose Paim de Andrade, founder of real-estate investment firm Maxcap, recently told The Economist that Brazil’s housing boom will continue "for five to seven years".
