E.ON SE (EONGY.PK) and EBX, its Brazilian partner, have agreed on the increase of E.ON's stake in MPX.
In April 2012 E.ON acquired an 11.7 per cent stake in MPX, EBX Group's energy arm controlled by Eike Batista. E.ON and EBX have now agreed to strengthen their strategic partnership to support MPX to become the largest private energy company in Brazil.
As per the deal, E.ON will acquire 24.5 per cent of MPX from EBX for a minimum price of R$10.00 per share plus up to a further R$ 1 per share depending upon the final settlement price of a planned capital increase and the share price performance of MPX in the six months following the closing of the transaction. E.ON will make an investment of up to R$1.6 billion or 0.6 billion euros.
In addition, MPX will make a capital increase of R$1.2 billion or 0.5 billion euros. E.ON said it undertook to subscribe for a 30.6 per cent share of the capital increase at a minimum price of R$10.00 per share. E.ON's investment in the capital increase will be R$0.4 billion or 0.1 billion euros. The Brazilian investment bank BTG Pactual has been retained by MPX as a global bookrunner for the public offering with firm underwriting commitment at the same price of R$ 10.00 per share for the remaining shares not subscribed by E.ON.
Additionally, the existing MPX-E.ON 50:50 Joint Venture company will be integrated into MPX. This will lead to an increase of E.ON's stake in MPX to around 36.1 per cent as E.ON will receive shares in MPX equivalent to the value of its stake in the Joint Venture.
E.ON's investment will total up to R$1.9 billion or 0.8 billion euros. In addition, EBX and E.ON will enter into an agreement under which they will exercise their voting rights in MPX on an equal basis enabling them together to manage and develop the company. E.ON will also have an equal participation in the day to day management of MPX and will be entitled to increase its representation on MPX's Board of Directors.
E.ON and MPX expect to close the first step of the transaction by the end of April 2013 after the respective antitrust approval. The capital increase is expected to take place during the summer.
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