Brazilian healthcare company Oncoclínicas (ONCO3.SA) said on Tuesday it will continue to evaluate potential financial and corporate transactions after confirming the end of discussions with Porto Seguro (PSSA3.SA) and Fleury.
Both Porto Seguro and Fleury had earlier announced they were ending talks with Oncoclínicas after the expiration of a 30-day exclusivity period on April 12, during which the companies had explored the creation of a new entity.
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“Porto and Fleury have decided not to extend the exclusivity period of the term sheet; consequently, negotiations regarding the potential transaction have been officially terminated,” Oncoclinicas said in a securities filing.
The three Brazilian companies had previously signed a non-binding term sheet last month to negotiate a potential 500 million reais ($100.5 million) investment from Porto and Fleury to create a new company that would have incorporated Oncoclínicas’ oncology clinics.
Oncoclínicas, which reported net debt of 2.94 billion reais at the end of December, is exploring options to address its financial difficulties. The company said on Monday that it plans to file a precautionary relief action to temporarily suspend debt acceleration clauses.
Oncoclínicas’ shares rose 4% after falling more than 10% in early Tuesday trading. Porto Seguro’s stock declined 2%, while Fleury’s shares gained 2%.
Analysts at JPMorgan said the announcement on Tuesday was not unexpected, citing “major uncertainties” surrounding Oncoclínicas.
“Our view remains that a potential capitalization should take place at the Oncoclinicas level, while, following the recent developments, there may be further debt restructuring,” they said in a note.
