Harvard Business Review: Why Dynamo’s Shareholder Pact Ended
Helio Bornstein, the controller of HBR Realty, said today that he had bought 5.8 million shares of the company from the Dynamo fund, ending the shareholders’ agreement between him and the manager in place. 2014. At 25.1 million reais, or 5.6%. Of the total capital of the real estate rental company.
FIP, named Tierra Fundo de Investimento, is the company’s second largest shareholder after Hélio. Prior to the purchase, he held 28% of the share capital – a stake that will be reduced to 22.4%. Hélio now holds around 40% of the company’s share capital after the operation.
The shareholders’ agreement between Hélio and Dynamo was signed in 2014, but underwent a major overhaul in November 2020, ahead of HBR’s IPO. In a paraphrase, the agreement began to state that Dynamo could no longer participate in the controlling block after its stock close expired – which has now happened.
Of the 28% held by the manager, only 10% was linked to the agreement, which stipulated that if Dynamo held less than 5% of the share capital linked to the agreement, it would be terminated. In this case, Hélio will have the right of first refusal on the shares that Dynamo puts up for sale.
It was a private equity investment that they took over. “It’s normal for them to leave the control block at some point after the company’s IPO,” a source familiar with the matter said. The deal comes at a time when HBR is trading for a quarter of the IPO’s remaining value – with Selic’s rally hitting real estate stocks.
The company – which owns three shopping centers, five first-class office buildings and several convenience centers under the Comvem brand – is valued at 450 million reais on the stock market alone. In comparison, this would barely equal the value of just one of Faria Lima’s premises, HBR LEAD Corporate – considering the square meter of similar transactions that have taken place in recent months. But the company has a net debt of 800 million reais.
Still, the sale should guarantee a “reasonable return” for Dynamo, given that he joined the company more than a decade ago, the source said. The liquidity should also allow the manager to look for other opportunities in the market as many stocks are traded at appropriate discounts. Dynamo first invested in HBR in 2012, shortly after the company was founded.
In the IPO, I invested an additional 200 million reais. With the deal ending, Dynamo will be free to sell the rest of its shares in the market, although that is more likely not to happen in the short term, according to the source.