Minas Gerais Reopens Copasa Sale and Sets R$47.23 Price Floor

Overview

• The state reopened the contest for a reference investor on Thursday and set a minimum price of R$47.23 per Copasa share so bidders can revise, withdraw or submit new offers through June 3.
• Minas Gerais filed a preliminary prospectus with the CVM on May 20 for a secondary offering of 171,113,881 ordinary shares, meaning sale proceeds will go to state coffers rather than to Copasa’s balance sheet.
• Strategic groups reported to have bid in the first round include the Livorno/Aegea consortium and Equatorial, whose initial proposals were near R$40 per share and prompted the prospectus revision to push prices higher.
• The prospectus slightly reduced the extra lot from 19,135,730 to 19,035,730 shares because 46,737 state-owned shares are blocked by court orders, a technical change that does not alter the core structure of the sale.
• The timetable remains compressed with retail reservations from June 5, price fixation around June 11, trading expected to begin on B3 on June 15 with payment on June 16, and the government warning it may pursue a dispersed sale if no adequate anchor investor emerges.