Cosan Tries to Appease Minority Shareholders

Cosan drew harsh criticism from shareholders, the CVM and the Bovespa after its seemingly impudent shareholder restructuring and NYSE IPO in August. But it is apparently throwing minority investors of its Bovespa-listed entity a bone with an offer for more influence. At a shareholder meeting scheduled for Sao Paulo December 5, Cosan’s controlling shareholder Rubens Ometto Mello, who shored up his control over the company via an August US listing, will offer minority shareholders the option to vote on and participate in any acquisitions or investments the US-listed entity, Cosan Ltd, makes outside Brazil. They are excluded from this today. The measure marks an improvement for the snubbed minority equity holders. But it ultimately fails to change the fact that they are powerless if the company were offered a takeover deal by a suitor. Furthermore, “if the idea was to give Cosan SA’s shareholders access to international opportunities, this solution only gives them the right to have a non-controlling stake in such an investment,” says Itau Corretora in a report.