Brazilian energy company AES Tiete Energia SA (B3:TIET11) has rejected the hostile takeover proposal by Eneva SA (B3:ENEV3) after the former's board of directors voted against it unanimously on Sunday night.
On March 1, Eneva made a binding cash-and-stock proposal considered hostile by the target company. Valid for 60 days, it offered a BRL-2.75-billion (USD 521.6m/EUR 480.1m) cash payment and the exchange of 0.0461 of Eneva common shares for every common or preferred share of AES Tiete.
AES Tiete cited several reasons for its decision to reject the bid, such as that the terms and conditions of the offer were not in the company and its shareholders' best interests, mainly due to the incompatibility of the two businesses. AES Tiete produces electricity from renewable energy sources while Eneva's focus on thermal generation based on gas and coal.
Despite the rejection, AES indicated that it would welcome a new proposal as long as it includes, among other things, the possibility of full liquidity for its shareholders that do not wish to migrate to Eneva.
Eneva, in a separate statement, said it will "assess the terms of the Letter and inform its shareholders and the market in general about relevant developments related to the matters discussed herein."