As part of the regulatory agenda of the Brazilian Securities and Exchange Commission (“CVM”), at the end of last year (December 23), the CVM launched a public consultation notice to review several points of the current CVM Resolution 85/2022 (which replaced, without changes, the former CVM Instruction 361/2002), which regulates public offerings for the acquisition of shares (“OPA”), with the purpose of issuing a new resolution that will consolidate the precedents of the collegiate body obtained over more than 20 years of application of the rule, as well as introducing a series of innovations. The objective is to make the OPA procedure simpler and faster, reducing the regulatory costs involved. Interested parties may submit suggestions and comments to the CVM regarding the proposals until March 7, 2024.

Two draft resolutions were submitted for consultation. Draft “A” revokes CVM Resolution 85/2022, which currently regulates the matter, and presents a broader review of the matter, introducing new criteria for the takeover bid for increased shareholding, the creation of a different quorum for the takeover bid for cancellation of registration, changes related to the takeover bid intermediary and the provision for automatic exemptions from auction and preparation of the appraisal report. In turn, draft “B” brings a specific adjustment to CVM Resolution 77 to clarify that the prohibition on the repurchase by a publicly-held company of its own shares during the takeover bid period does not extend to cases in which the takeover bid is formulated by the company itself.

Regarding the adjustments suggested by draft “A”, the first involves calculating the participation required to make a public offering for a capital increase mandatory. This type of public offering consists of making a public offering mandatory in the event of acquisition of more than 1/3 of the total shares of each type and class in circulation by the controlling shareholder or a person related to him. Under the rule currently in force, for publicly-held companies in existence on March 5, 2002, the calculation must be based on the shares in circulation on September 4, 2000. For companies that do not meet this requirement, the base number must be calculated based on the number of shares in circulation on the closing date of the first public offering for distribution of shares, or if no public offering has been made, on the date the company is registered for trading on the market. Due to the occurrence of several corporate events in the life of the company, such as capital increases and reductions, grouping of shares and conversion of shares, the formula used by the CVM has become complex and costly.

Luiz Eduardo Malta Corradini
lcorradini@cascione.com.br

Pedro Henrique Silva Rizzo
prizzo@cascione.com.br

Lucas Souza Galipe
lgalipe@cascione.com.br