MPX Cans Follow-On, Batista Resigns

Brazilian power generator MPX Energia cancelled the public follow-on equity offering it signaled last month, opting to tap existing shareholders instead for two-thirds the amount initially targeted. MPX will raise BRL800m of equity at BRL6.45 per share. Germany energy firm E.ON will buy BRL366.7m worth of the sale. The rest will be offered to MPX’s other shareholders, with lead manager BTG Pactual picking up anything left over. The move came after MPX’s shares lost nearly a third of their value since late March, when the firm agreed a public follow-on of at least BRL1.2bn at a BRL10 minimum share price, underwritten by BTG. At that point, E.ON said it would invest BRL366m, as part of an agreement to acquire 36.2% of the firm under which it is also buying out Eike Batista’s 24.5% stake. BTG told the board of MPX last week that the BRL10 per share price was not longer feasible. At the same meeting, Batista resigned as chairman, with E.ON board member Jorgen Kildahl replacing him on an interim basis. MPX stock rallied at the end of last week to close at BRL7.3 per share, up 13% from its low on Wednesday.