(Updates with context, Eletropaulo deal details)
BRASILIA, May 8 (Reuters) - Neoenergia SA, Brazil’s largest utility by number of customers, has requested arbitration over issues related to an investment agreement it had signed with power distribution company Eletropaulo Metropolitana SA, according to a securities filing.
Under the terms of an April 16 agreement, Neoenergia, controlled by Spain’s Iberdrola, committed to acquire Eletropaulo shares in a new share offering, under a deal that could evolve into a full takeover.
Four days later, however, Eletropaulo’s board canceled the share offering after receiving a takeover bid from Italy’s Enel SpA. Enel’s bid was conditioned on Eletropaulo canceling the share offering.
In the filing, Eletropaulo said the request for arbitration is “groundless,” since the investment agreement “has been fully complied with.”
Enel’s last takeover bid was 32.20 reais per share, valuing Eletropaulo at $1.54 billion. Neoenergia’s last bid was 32.10 reais per share.
Both companies have to present their final bids by May 24, 10 days before an auction scheduled for June 4 at the Brazilian stock exchange.
The rules for the auction have been defined by Brazil’s securities industry regulator CVM, according to two sources with direct knowledge of the situation who asked for anonymity. (Reporting by Bruno Federowski and Tatiana Bautzer; Editing by Steve Orlofsky)