April 23 (Renewables Now) - Brazilian energy company Eneva SA (B3:ENEV3), which was looking to take over AES Tiete Energia SA (B3:TIET11), has decided to end negotiations with the target company.
The end of the discussions comes after AES Tiete turn down the offer earlier in the week, saying that the terms and conditions were not in the best interest of the company and its shareholders, mainly due to the incompatibility of the two businesses.
On Tuesday, Eneva said that despite its willingness to make changes to its proposal, it decided to pull the plug on the transaction after being informed that the voting rights of the shareholders holding preferred shares will not be recognised. This would be a breach not only of AES Tiete's bylaws but also of the Level 2 Listing Rules of Brazil's B3 stock exchange.
"In Eneva's view, the transaction should not continue, at this moment, in the midst of a looming battle over the rights of the shareholders holding preferred shares of AES Tiete and the interests of the controlling shareholder of that company," the suitor said in a statement.
On March 1, Eneva made a binding cash-and-stock proposal that was deemed hostile by the target company. Valid for 60 days, it offered a BRL-2.75-billion (USD 510.5m/EUR 471m) cash payment and the exchange of 0.0461 of Eneva common shares for every common or preferred share of AES Tiete.
(BRL 1 = USD 0.185/EUR 0.171)