Brazilian electricity distribution company Eletropaulo has announced the issue of 58.9 million new shares, equivalent to a 26% stake, attracting bids from Neoenergia, the Brazilian subsidiary of Spain's Iberdrola group, and from Enel Brasil (part of Italian energy group Enel).
Neoenergia offered BRL 25.51 (US$7.55) per share for the 26% stake, and committed to acquire the rest of Eletropaulo's shares at a total cost of BRL5.7bn (US$1.7bn). Eletropaulo agreed to sell the stake to Neoenergia, if no other investor bid higher than BRL 25.51 per share. Italian energy group Enel, through its wholly-owned Brazilian affiliate Enel Brasil, has then launched a voluntary tender offer for the acquisition of the entire capital of Eletropaulo for a total consideration of BRL4.7bn (US$1.38bn). Enel's offer will be reviewed by Eletropaulo and will be submitted to the Brazilian energy regulator Agência Nacional de Energia Elétrica (ANEEL).
Eletropaulo is based in São Paulo and currently serves more than 18 million customers across 24 municipalities. It is currently owned by Energisa, an electric services company based in Rio de Janeiro. Iberdrola is already active in Latin America, while Enel is seeking to invest in this fast-growing region.