Mexico’s Bachoco Suspends IPO as Minor Stakeholders Squabble Over Share Price

The poultry giant’s initial public offering has been blocked by minority shareholders amid controversy over the proposed share price

Pedestrians pass in front of the Bolsa Mexicana de Valores SAB, Mexico's stock exchange, in Mexico City, Mexico. Photographer: Cesar Rodriguez/Bloomberg
September 26, 2023 | 10:36 PM

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Mexico City — A federal judge in Mexico has ruled the provisional suspension of the tender offer launched by Industrias Bachoco on the Mexican Stock Exchange, after a group of minority investors requested an injunction to seek a better price for the sale of shares they hold, according to court documents.

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Federal judge Celina Angélica Quintero Rico granted the provisional suspension of the public offering process that was scheduled to conclude on September 29.

The documents to which Bloomberg Línea had access detail that the judicial decision is related to a lawsuit by shareholders with a 1% stake in the poultry producer.

After the provisional suspension is granted, an approval period will begin for investors to demonstrate that the fair price of the shares does not correspond to that proposed by Industrias Bachoco and must be evaluated according to the market, said a person with knowledge of the matter who preferred not to be named.


Bachoco will have until noon on September 27 to file an appeal. The company did not respond to Bloomberg Línea requests for comment.

On September 26, Bachoco issued a public offering notice seeking 2.28% of the outstanding capital stock. So far, the Mexican Stock Exchange has not reported on the suspension.

According to a person familiar with the matter, the investors consider the amount at which they evaluated the price of the shares to be illicit and believe that the actual price of the shares is 130 pesos per share ($7.41), and not 81.66 pesos per share.

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A controversial delisting

Controversy has accompanied Bachoco’s proposed exit from the stock exchange since its announcement.

In October 2022, the company announced that it would go to the market for the listed shares at a price of 81.66 pesos per share, and which was also announced by another group of investors comprising GBM, Alliance Holding LP and Sura.

Teddy Browne, a US investment and fund management firm, stated that the price was 70% below fair value after comparing industry peers and Bachoco’s cash value.

The fair price from their perspective ranged between 120-140 pesos per share.


In May 2023, Bachoco announced that it would begin the process of delisting and cancelling its shares from the Mexican Stock Exchange due to the high costs of maintaining its listing.

Despite the fact that the issuer may not comply with the requirements to remain on the exchange, investors will file a new injunction with the Mexican Stock Exchange.

On September 28, representatives of the investors’ group will hold a hearing to continue with the process.

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