High spirits as Mexico’s Jose Cuervo prices IPO at top of range: sources

2/8/2017 Reuters

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via Flickr – Andre Burgos

The initial public offering for tequila maker Jose Cuervo priced at the top of the expected range at 34 pesos per share, two people said on Wednesday, marking the first Mexican IPO since Donald Trump won the U.S. presidency.

The offer was more than eight times oversubscribed, the sources, who spoke on condition of anonymity, said. The pricing of the 476.6 million share offer means the company raised at least 16.2 billion pesos ($791 million).

 Jose Cuervo, the world’s biggest tequila maker, did not respond to requests for comment.

The company, officially known as Becle, put its IPO on hold twice last year, as Trump’s march to the White House gathered strength, sending the peso currency to a series of record lows.

Trump has threatened to slap a hefty tax on products Mexico sends to the United States to pay for a border wall, as well as tear up a joint trade deal with Mexico. U.S. protectionist measures against Mexico could hurt Jose Cuervo, which generates 64 percent of its $1.165 billion in sales from American and Canadian consumers.

But investors have expressed strong interest in the IPO, citing Cuervo’s strong dollar-based earnings and saying demand for tequila is not heavily dependent on prices.

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