Struggling with debts (BR$2.9B) and delays in delivery of sold properties, Gafisa, one of the largest real estate developers in Brazil saw its market value drop to a third this year (read our earlier post “Gafisa: Throw this stock away“). The fall in its stock price sparked the interest of companies and investment funds. In August, the group GP Investments, a former shareholder of Gafisa, started to consider acquiring the control of the real estate developer. Now, it’s the time of Eztec to express an interest in acquiring its competitor. Eztec is a family-run, medium sized real estate developer in Brazil. The possibility of such an operation seemed a far dream years ago. In early 2011, Eztec was worth BR$2B, less than 40% of Gafisa’s market value. But today the story is different: with the best profitability and stock performance of the sector, Eztec has positioned itself as a potential buyer. Both Eztec and Gafisa deny the negotiations, but sources say the story may be true.
The table below shows both companies (and the entire Brazilian real estate development sector) in numbers, as per JPMorgan: