July 23, 2020 / 9:38 PM / 22 days ago

UPDATE 2-Brazilian power company Eneva proposes $1.4 bln tie-up with AES Tiete

(Adds information on deal structure)

SAO PAULO, July 23 (Reuters) - Brazilian power company Eneva SA submitted a 7.5 billion reais ($1.44 billion) offer to purchase a controlling stake in Sao Paulo-based AES Tiete Energia SA, it said on Thursday, contingent on any deal having the support of major AES Tiete shareholder BNDES Participacoes SA.

BNDES Participacoes, a holding company for Brazilian state bank BNDES, is one of the biggest shareholders in AES Tiete, which is ultimately controlled by Virginia's AES Corp.

The move marks the latest in Eneva's effort to revive a deal that failed earlier this year, after AES Tiete's board rejected its previous offer.

Eneva is offering AES Tiete's shareholders 0.06539522 of its new common share per one common or preferred share of its target, implying a 10% premium over Thursday's prices. The new offer is almost 1 billion reais higher than its previous bid for AES Tiete, although a higher proportion of the previous offer was in cash.

BNDES said in May it had hired investment bank BR Partners as adviser to sell its 28.41% stake.

In a Thursday interview with Reuters, Eneva Chief Financial Officer Marcelo Habibe said Eneva would end up with 70% of the new company should the deal be accepted, and AES Tiete's current shareholders would hold 30%.

($1 = 5.21 reais)

Reporting by Roberto Samora, Carolina Mandl and Gram Slattery; Editing by David Gregorio and Peter Cooney

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