By Brazil Stock Guide – By Brazil Stock Guide – Companhia de Saneamento Básico do Estado de São Paulo (B3: SBSP3) filed a mandatory tender offer to acquire the remaining voting shares of Empresa Metropolitana de Águas e Energia (B3: EMAE4) after taking control of the São Paulo-based electricity company, formerly controlled by Nelson Tanure, following court actions that froze assets linked to the Banco Master group.
The offer price was set at R$49.46 per share, or about $10 at current exchange rates, and applies to up to 3.7 million common shares not already held by Sabesp. The transaction activates Brazil’s tag-along rules, requiring controlling shareholders to extend an offer to minority investors at 80% of the control price.
Sabesp paid R$61.83 per share to acquire control of EMAE, valuing the transaction at R$682.6 million, or roughly $138 million. The tender offer price will be adjusted by the Selic benchmark interest rate from Jan. 21, 2026, the closing date of the transaction, until settlement.
Market pricing has already converged toward the offer. EMAE’s preferred shares closed Friday at R$48, just below the tender price. The narrow spread signals limited upside for investors ahead of the formal launch of the bid.
Price Mechanics
The tender offer covers shares equivalent to 10% of EMAE’s total capital and about 25.1% of its voting capital. Sabesp said earlier disclosures calculated the per-share value using only common shares, while the total transaction price also reflected the acquisition of nearly 30,000 preferred shares.
“The tender offer is a direct legal consequence of the transfer of control,” said Daniel Szlak, Sabesp’s chief financial and investor relations officer, in the regulatory filing.
Repricing a Flagship Privatization
The takeover effectively reset the valuation of one of São Paulo’s most emblematic privatizations. In 2024, the investment vehicle Phoenix Fund paid about R$1.04 billion for roughly 40% of EMAE, implying close to R$26 million per percentage point of capital. Sabesp entered at about R$22.9 million per point, an implicit discount of roughly 12%.
There was no material deterioration in EMAE’s hydropower plants, dams or ferry operations over the period. What changed was the perception of execution and counterparty risk.
Phoenix was controlled by Tanure and relied on financing arrangements connected to the Master group, led by banker Daniel Vorcaro. That structure later came under stress, triggering defaults, collateral enforcement and legal disputes. The resulting court actions weakened Phoenix’s position and led to a forced change in control.
The sequence left an unusual outcome. EMAE moved from a private controller unable to sustain its financial backing to Sabesp, a company privatized only recently under the same São Paulo administration that oversaw the original sale. Officials describe the transaction as a technically sound integration of water and energy assets.
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