New guidelines, part of the 2024 regulatory agenda, take effect on July 1, 2025
10/30/2024
The new rules concerning the so-called OPAs—public takeover bids—were issued on Tuesday as part of the Brazilian Securities and Exchange Commission’s (CVM) regulatory agenda for this year. These measures will come into force on July 1, 2025.
Public takeover bids, conducted outside organized securities markets, can take several forms and aim at acquiring shares of a publicly traded company. They may occur, for instance, during a change of control block, delisting, and other scenarios.
The CVM has issued two norms: the first, Resolution 215, establishes a new regulatory framework applicable to OPAs, replacing CVM Resolution 85, which has been in effect since 2022. The second, Resolution 216, modifies other rules to align them with the new regulation.
The regulation was well-received by experts consulted by Valor. Among the innovations, they highlight the simplification of the criteria that mandate an OPA for increased participation, which was previously calculated based on a formula applied by the CVM that was sometimes challenging to apply in practice, causing legal uncertainty.
Now, in an OPA for increased participation, the CVM has determined that the operation will be mandatory whenever the acquisition of outstanding shares by the controlling shareholder or an affiliated person leads to the reduction of the total outstanding shares of the same class and type to below 15%.
Another significant change is the possibility of combining a takeover OPA with an OPA for delisting.
“This was a long-standing market demand, previously prohibited based on case-specific decisions, and now it is explicitly allowed,” said Evaristo Lucena, a partner in the transactional area at Trench Rossi Watanabe.
In the case of a differentiated quorum (OPA for delisting), it was established that a simple majority would suffice when the number of outstanding shares of the “target company” is less than 5% of the share capital.
According to Marcos Sader, a partner at I2A Advogados, the simplification acknowledges that companies with a smaller number of outstanding shares relative to total capital (“free float”) can have a lower quorum for a delisting OPA. “Thus, the quorum shifted from two-thirds of circulating shares to a simple majority. This facilitates the closing of capital when there is little shareholder dispersion.”
In cases of automatic waiver of the valuation report, the new regulation allows the price of the shares subject to the OPA to be determined based on alternative criteria that serve as a reference for fair value.
In the OPA auction, the hiring can be automatically waived in situations of low shareholder dispersion or when the auction costs are disproportionately high compared to the offer’s value. The new regulation also covers the roles performed by the intermediary and establishes rules for registration procedures and confidential consultations.
CVM President João Pedro Nascimento said that the resolutions consider previous practical experiences and reflect market developments and international standards.
*By Victoria Netto, Valor — Rio de Janeiro
Source: Valor International