May 9 (Renewables Now) - Neoenergia SA, one of the suitors looking to buy Eletropaulo Metropolitana Eletricidade de Sao Paulo SA (BVMF:ELPL3), has requested arbitration proceedings against the target over a cancelled share offering.
In mid-April, Neoenergia, a Brazilian utility controlled by Spain’s Iberdrola SA (BME:IBE), entered into an investment agreement with local power distributor Eletropaulo. The deal included a provision for Neoenergia to subscribe to a certain portion of a BRL-1.5-billion (USD 421m/EUR 354m) capital hike at Eletropaulo. The latter, however, terminated the share offering after receiving a more appetising takeover offer from a Brazilian subsidiary of Italian peer Enel SpA (BIT:ENEL).
The Iberdrola unit claims that the decision to cancel the share offering violates the investment agreement between the two parties. Eletropaulo responded by saying that it had fully complied with the deal.
Now, both Neoenergia and Enel Brasil Investimentos Sudeste SA are participating in a bidding war for Eletropaulo, with respective bids of BRL 32.1 per share and BRL 32.2 apiece. At the currently offered price, Enel’s overall investment in Eletropaulo could reach BRL 5.4 billion, it said previously.
Neoenergia and Enel can sweeten their bids by May 24. An auction is scheduled for June 4.
(BRL 1.0 = USD 0.280/EUR 0.236)