Brazil’s largest cement producer, Votorantim Cimentos, canceled its multibillion-dollar initial public offering on Tuesday amid worsening market conditions, a person closely involved with the operation said.
The I.P.O. was expected to raise as much as $4.7 billion in shares offered both on the BM&F Bovespa in São Paulo and the New York Stock Exchange. It would have been one of the largest offerings anywhere in the world for 2013.
“Investors were offering less than the target price range. The company would not consider that possibility even for a moment,†said this person, who spoke on condition of anonymity.
Since the I.P.O. was announced May 31, the main São Paulo stock inex, the Ibovespa, has fallen more than 7.5 percent in Brazilian currency and more than 9 percent when converted to dollars. Since then, the Central Bank of Brazil has had to intervene repeatedly to support the currency.
Emerging markets in general have suffered from speculation that the Federal Reserve will reduce its monetary easing, potentially reducing global liquidity available.
The target price range of the deal was 16 to 19 reais for shares in São Paulo and $15.59 to $18.51 per American depositary receipt that would have represented one common and two preferred shares.
The deal had been expected to be priced on Wednesday, with the first day of trading scheduled for Thursday.
Eduardo Carlier, a portfolio manager with Schroder Investment Management Brazil, said that fro! m the start, Votorantim Cimentos was looking for a price that he considered “a little too high.†As market conditions worsened in recent days, the owners’ target range became impossible.
“The company is very good; the question has always been about the price,†Mr. Carlier said.
Brazil’s economy is expected to grow only 2.5 percent this year, and investors are losing confidence that the government has a realistic plan for sustainable growth.
Six I.P.O.’s have been held in Brazil so far in 2013, including the biggest one in the world to date this year, when the insurance giant BB Seguridade raised $5.74 billion at the end of April.
Votorantim Cimentos’s I.P.O. is the first to be canceled in Brazil this year. The person involved in the operation said the company had not yet decided whether it would try to go to the market again later this year.
Itaú BBA, Morgan Stanley, JP Morgan Securities, Credit Suisse, BTG Pactual, HSBC, Goldman Sachs, Deutsche Bank, Banco Bradesco BBI, Bank of America Merrill Lynch, Banco do Brasil and Banco Votorantim were listed as the underwriters of the offering.
