Empresas Publicas de Medellin, a Colombian utility company, is the sole bidder for a $1 billion stake in Transmissora Alianca de Energia Eletrica SA, according to a person with knowledge of the matter.
EPM, based in Medellin, is in advanced negotiations to buy about 30 percent of Taesa (TAEE11) from private-equity firm Fundo de Investimento em Participacoes Coliseu, said the person, who asked not to be identified discussing private information. A final agreement may take more than a month to reach as the buyer conducts due diligence, the person said. There is no guarantee of an accord, and talks may still fall apart.
With the purchase of the Taesa stake, EPM would expand its presence in Latin America and pair up with Brazil’s largest power generator by market capitalization, Cia. Energetica de Minas Gerais, or Cemig.
Taesa, a Rio de Janeiro-based electric utility, climbed 1.9 percent to 19.98 reais yesterday in Sao Paulo. Cemig (CMIG4) jumped 5.2 percent to 18.60 reais.
Coliseu owns about 44 percent of the common shares in Taesa and has a joint control agreement with Cemig, which owns about 42 percent of voting shares and needs to approve any new buyer. Cemig has signaled it would approve such an investment from EPM, according to the person.
“As part of our growth strategy, the organization evaluates many investment options in Brazil as well as other Latin American countries,” EPM said in an e-mailed response to a request for comment. “However, we don’t know the source of the information, and we have no official comment in that regard.”
Representatives for Taesa, Coliseu and Cemig declined to comment. Banco Modal SA, which is advising Coliseu, also declined to comment.
Brookfield Renewable Energy Partners LP and Canada Pension Plan Investment Board also had expressed interest in the Taesa stake initially, people familiar with the situation said in April. Those companies aren’t involved at this point, the person familiar with the talks said. Spokesmen for Brookfield and Canada Pension declined to comment.
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