JBS plan for US listing in doubt, early shareholder vote shows
Early count shows 52% of votes against dual listing plan
23 May 2025
3 minute read
By: An early count of JBS shareholder votes released on Thursday showed a slim majority opposed to the Brazilian meatpacker's proposal to list shares in the United States, threatening a move that has driven a sharp rally by its shares, reported Reuters.
In a securities filing, the company released a voting bulletin showing about 52% of votes so far opposed the plan, underscoring that the decision will go down to the wire at a Friday shareholder meeting that will tabulate outstanding votes.
JBS shares have surged over 30% since mid-March as stock analysts touted the perks of a US listing for its valuation. Shares seesawed on Thursday before slipping about 2% in midday Sao Paulo trading.
Some JBS investors have been buying more shares to sway the final vote, according to people familiar with the matter.
"I believe the breakdown of voting tomorrow will be more favorable, because it will be local institutional investors and individuals here in Brazil who have been more supportive of this move," said Leonardo Alencar, an analyst at brokerage XP.
Delays, concerns
Plans for a US listing were delayed repeatedly over the past decade, hindered by scandals involving the company's top shareholders, brothers Joesley and Wesley Batista, as well as concerns about its environmental impacts and the transparency of its climate targets.
Since the US Securities and Exchange Commission gave its approval for the New York listing in late April, environmental groups and US politicians have aired concerns.
Thursday's filing showed some 271 million votes against the proposal to delist shares in Sao Paulo to create a dual US-Brazil listing via a Netherlands-based entity. The question had 246 million votes in favour and over 3 million abstentions.
At a shareholder meeting on Friday, JBS is expecting to tabulate up to 210 million more minority shareholder votes, according to a person familiar with the process, who said those votes could swing the result in favor of the company's plan.
If approved, JBS shares will trade on the New York Stock Exchange as well as on the Sao Paulo bourse, called B3, via Brazilian depositary receipts.
The Batista family and state lender BNDES, which together hold about two-thirds of shares, are not voting on the proposal, leaving the decision in the hands of minority investors.
Recent recommendations by proxy advisory firms Glass Lewis and Institutional Shareholder Services may have swayed those investors' votes. Both questioned the structure of the listing, warning it could end up weakening minority shareholder rights.
Under the proposed structure, a Netherlands-based company will issue Class A shares, which will be publicly traded, and Class B shares, which will have 10 times as much voting power.
In one potential scenario, the controlling shareholders of JBS could end up with 85% of voting power.
JBS defended the proposed structure, telling shareholders in a letter that ISS had failed to recognize the strategic value of the controlling shareholders in establishing a leading position in the global meat industry.
The back-and-forth was enough to raise doubts about the proposal's passage even before Thursday's preliminary count.
JPMorgan analysts recommended last week that investors hedge a potential rejection by buying JBS put options, given slipping odds of approval, which previously were "very favorable."
The analysts warned in their note that, although approval still looked likely, a rejection could wipe out a two-month rally since BNDES said it would abstain from the vote.
Igor Guedes, an analyst at Genial Investimentos, said since the ISS recommendation against the dual listing, foreign investors had increased their holdings while Brazilian investors reduced their exposure.
That may increase the risk of rejection, he said, as foreign funds seem more open to the proxy advisories' recommendations.
