A consortium of Canadian pension fund CPPIB and Brazil’s Votorantim Energia won a privatization auction on Friday to buy a controlling stake in power company Cesp from the government of Sao Paulo state.
The consortium, called Sao Paulo Energia, will pay 14.6 reais per Cesp share, a 2.09-per-cent premium over the minimum sale price at the auction. Considering Sao Paulo’s government stake of 40.6 per cent, the consortium will pay a total of 1.7 billion reais (US$458.25-million).
Shares of Cesp, or Companhia Energética de Sao Paulo SA, rose more than 12 per cent after the auction to 17.07 reais each.
The consortium was the only bidder at the auction, which ends a privatization process that started last year and faced postponements due to legal disputes.
CPPIB and Votorantim Energia already have a joint venture in Brazil that invests in renewable power sources.