Oncoclinicas ends talks with Porto and Fleury, weighs new deals

SAO PAULO, April 14 (Reuters) – Brazilian healthcare firm Oncoclinicas said on Tuesday it would continue to evaluate potential financial and corporate transactions after confirming the end of talks with Porto Seguro and Fleury.    

Both Porto Seguro and Fleury had previously announced their intentions to end discussions with Oncoclinicas following the expiration of a 30-day exclusivity period on April 12 under which the companies mulled the creation of a new company. 

“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 entered a non-binding term sheet last month to negotiate a potential 500 million real ($100.5 million) investment from Porto and Fleury to form a new company that would have included Oncoclinicas’ oncology clinics.

Oncoclinicas, which had a net debt of 2.94 billion reais by the end of December, is seeking alternatives to solve its financial struggles. It said on Monday that it would file a precautionary relief action to temporarily suspend debt acceleration clauses.

Oncoclinicas’ shares were up 4% after dropping more than 10% in early trading on Tuesday. Porto stock fell 2%, while Fleury’s shares rose 2%.

Analysts at JP Morgan said Tuesday’s announcement was not a surprise given “major uncertainties” within Oncoclinicas.

“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.

($1 = 4.9775 reais)

(Reporting by Isabel Teles; Additional reporting and writing by Fernando Cardoso; Editing by Kirsten Donovan and Emelia Sithole-Matarise)