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November/December 2024

_The November | December edition│2024 of our Newsletter has the following highlights:

– Disclosure of the Corporate Events calendar

– CVM amends rules regarding Public Offers to Acquire Shares

– STJ decides that Stock Options cannot be seized

_Disclosure of the Corporate Events calendar

Listed companies with shares traded on the special listing segments of B3 S.A. – Brasil, Bolsa, Balcão must disclose, by December 10, the annual calendar for the 2025 fiscal year, including at least the dates of the following events:

 

  • release of the complete annual financial statements and standardized financial statements (DFP);
  • release of the quarterly information (ITR);
  • holding of the Ordinary Shareholders’ Meeting; and
  • disclosure of the reference form (formulário de referência).

 

For other listed companies, the Brazilian Securities and Exchange Commission (CVM) Circular Letter recommends that the annual calendar also be disclosed to ease the monitoring of the company’s activities by investors and other stakeholders.

 

_ CVM amends rules regarding Public Offers to Acquire Shares

CVM has issued Resolutions 215 and 216, which address the rules applicable to Public Offers to Acquire Shares (“OPAs”), following Public Consultation No. 05/2023.

 

Resolution 215 establishes a new regulatory framework for OPAs, revoking CVM Resolution 85. Resolution 216 was issued to amend other existing regulations, aligning them with the provisions introduced by Resolution 215. Both resolutions will take effect on July 1, 2025.

 

Among the changes introduced by the resolutions, the main improvements are as follows:

 

 

  • OPA for Participation Increase: The obligation to carry out an OPA will now apply whenever the acquisition of outstanding shares by the controlling shareholder or an affiliated party reduces the total outstanding shares of the same class and type to less than 15%. Under the current rule, the OPA is mandatory only when the acquisition corresponds to more than one-third of the outstanding shares of a specific class or type, which has previously led to debates about adjustments in calculation parameters over time. Notably, if a company already has less than 15% of outstanding shares of a given class or type when CVM Resolution 215 takes effect, this will not trigger an OPA due to an increase in participation.

 

  • OPA for Cancellation of Registration: For companies with less than 5% of outstanding shares, the quorum for delisting has been reduced to a simple majority, replacing the current requirement of two-thirds of the share capital. For companies with more than 5% outstanding shares, the acceptance quorum of two-thirds of the share capital remains unchanged.

 

  • Automatic Waiver of Valuation Report: The price of the shares can now be set based on alternative criteria which may work as a fair value, such as:

 

  • Based on a legal transaction conducted within 12 (twelve) months prior to the OPA registration request date, provided that: (i) it was executed between non-related parties; (ii) it involves a quantity of shares equal to or greater than 20% of the company’s share capital; and (iii) it is not associated with another legal transaction from which the parties involved, or individuals/entities related to them, have received or will receive other financial compensation.

 

  • Based on the highest unit price reached by shares of the same class and type as those subject to the OPA on the stock exchange where the company’s shares have the highest trading volume within 12 months prior to the OPA registration request date, provided that: (i) the company has complied with the submission of periodic and event-related disclosures; and (ii) the shares subject to the OPA were traded in at least 95% of trading sessions during this period, with an average daily financial trading volume equal to or exceeding BRL 10 million.

 

  • Based on the price the bidder is willing to pay, if this applies to a delisting OPA combined with a control acquisition OPA, and the number of shares required for the success of the control acquisition OPA equals or exceeds 20% of the company’s share capital.

 

  • Based on the price at which holders of more than one-third of the outstanding shares have committed to selling their shares in the OPA, if this commitment is not linked to another legal transaction from which the parties involved, or individuals/entities related to them, have received or will receive other financial compensation.

 

  • Auction: The minimum period for the auction has been reduced from 30 to 20 days after the launch of the OPA. In the case of changes in the OPA, the minimum period is 5 business days before the auction for price increases or renunciation of conditions, and 10 business days before the auction for other cases. Furthermore, the auction can be automatically waived in cases of low shareholder dispersion or when auction costs are disproportionately high in relation to the offer value.

 

  • Registration Procedures: Two new registration procedures have been established, automatic and ordinary procedures, replacing the previous voluntary and mandatory OPA regimes. The ordinary procedure requires prior analysis by the CVM and includes current “mandatory” OPAs and voluntary OPAs involving a securities swap. The automatic procedure, where prior CVM analysis is not required, applies to current voluntary OPAs that do not involve a securities swap, which are now referred to as optional OPAs.

 

Additional details about CVM Resolutions 215 and 216 can be found in Portuguese at the following link: https://www.gov.br/cvm/pt-br/assuntos/noticias/2024/cvm-edita-regra-para-ofertas-publicas-de-aquisicao-de-acoes-e-introduz-procedimentos-mais-simples

 

_ STJ decides that Stock Options cannot be seized

The 3rd Panel of the Brazilian Superior Court of Justice (STJ) has ruled that Stock Options cannot be seized. In September, the Court determined that Stock Options have a commercial rather than compensatory nature and has now affirmed the unseizability of this instrument.

 

The unanimous decision was reached within the scope of REsp 1841466 in a case examining the possibility of seizing Stock Options granted by a Company to a former director. According to the vote of the presiding Justice, Ricardo Villas Bôas Cueva, supported by all other justices, Stock Options serve as incentives for employees to participate of the company’s activities and possess a highly personal nature that should be preserved to avoid legal uncertainty. This instrument is intended to sustain employee engagement while maintaining alignment with shareholders. Allowing the seizure of Stock Options would enable any individual to become a shareholder, which could potentially bring outsiders into the business, resulting in the undermining of the instrument fundamental prerogatives.

 

The decision aligns with discussions in Bill 2,724/2022, which proposes the regulation of Stock Options. The bill is currently under consideration in the Brazilian Chamber of Deputies, where it awaits a report from the rapporteur in the Labor Committee, after having already been approved in the Senate.

 

For more information about the ruling in Portuguese, please consult: https://scon.stj.jus.br/SCON/GetInteiroTeorDoAcordao?num_registro=201803046034&dt_publicacao=11/11/2024.

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