Petz shares (PETZ3) had another session of strong gains, jumping this Monday (22) another 11.25%, continuing the 37% surge last Friday, when the company announced progress in the merger with Cobasi.
Petz shares jumped 11.25%, quoted at R$5.34. In April, the share gained 22% and, in 2024, jumped 34.43%.
On Friday, Petz reported that it signed a non-binding memorandum of understanding for the merger with Cobasi. According to the relevant fact, the agreed exchange ratio was R$7.10 per share, a value well above last Thursday’s closing price – that is, prior to the merger announcement – of R$3.50.
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Petz (PETZ3) shares soared
According to experts, the merger between the companies should create synergies, such as improving the distribution of brands in regions where their appeal is better, be it Cobasi or Petz, as well as exponential growth in business lines such as Zee.Dog or even the vertical of animal health.
“The distribution of all this practically doubles from one day to the next”, says Ricardo Bahiana, partner at B2R Capital, a consultancy specializing in M&A and valuation.
Andreas Ferreira, business analyst at Mantaro Capital, believes that companies have come together in a defensive movement. “I don’t think it’s an M&A for attack. It’s not exactly an ‘opportunistic’ business to gain market share,” he says.
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“The biggest opportunity may not be synergy, but taking advantage of each other’s strengths to defend themselves”, says the analyst, giving the example of the negative impact of competition from marketplaces on the latest results of the two companies.
For Ferreira, Petz seeks reference in one of the few retail M&As that actually worked in the last 15 years. The Raia Drogasil operation gave the combined company a gain in scale and market share, in addition to an “impressive dilution of companies”, he says.
Aggregator
For Santander analysts, the deal has the potential to be an aggregator for both companies, as it offers a unique opportunity to unlock significant synergies and create a stronger and more resilient entity.
“By joining forces, companies can better navigate the fierce competitive landscape, optimize, store expansion and presence strategies, and make more accurate capital allocation and improve decisions, especially as the online channel is reshaping the industry. ”
Santander adds that while it remains a challenge to quantify the benefits from reduced competition, investors are expected to focus on more tangible synergies, such as better contribution margins from physical stores and e-commerce, as well as expenses general and administrative.