State Grid Brazil Power Participações, a subsidiary of the China State Grid group, plans to appeal the decision of the Brazilian Securities and Exchange Commission (CVM) that considered the monetary value offered to acquire the interests of minority shareholders in CPFL Energias Renováveis too low, CPFL Energia said in a statement.
The amount offered by CPFL Energia, the largest Brazilian private company in the power production and distribution sector, offered 12.20 reais per share under the Public Offering, and the CVM suggested this amount should be increased to 16.69 reais.
Calculation by Brazilian financial website Valor showed that this increase in the price per share would mean that the Chinese group would have to pay an additional 1 billion reais (approximately US$307.1 million) to close the deal.
Minority shareholders of CPFL Energias Renováveis, such as Pátria Investimentos Ltda., the BTG Pactual Group, German Bank DEG and the International Finance Corporation of the World Bank Group, last October questioned the amount offered by China State Grid and proposed the figure be increased to 16.74 reais per share.
The China State Grid Group controlled 94.76% of the capital of CPFL Energia in December 2017, after acquiring more than 408 million ordinary shares still in the hands of third parties.
The group, which in Brazil already controls a power transmission network covering about 10,000 kilometres, entered the Brazilian market in 2010 when its local subsidiary won in April 2016 an auction to manage two new transmission lines.