CPFL ENERGIA S.A. ISIN Code: BRCPFEACNOR0
Common Shares: CPFE3 CVM Code: 01866-0
ON ACCOUNT AND AT THE ORDER OF State Grid Brazil Power Participações S.A.CNPJ/MF: 26.002.119/0001-97
INTERMEDIATED AND ADVISED BY This Notice is a free translation to English, prepared only for the convenience of the reader, of the Edital published in the Federative Republic of Brazil in the Portuguese language. The original Portuguese version shall prevail in case of any discrepancy with this free translation to English. IMPORTANT NOTICE TO UNITED STATES HOLDERS: The Offer described in this Notice (as defined below) is being made in the United States pursuant to an exemption from the U.S. tender offer rules provided by Rule 14d-1(c) under the U.S. Exchange Act and is for the securities of a company organized under the laws of the Federative Republic of Brazil. U.S. holders of Shares (as defined below) and/or ADSs (as defined below) should be aware that the Offer is subject to disclosure and procedural requirements of the Federative Republic of Brazil that are different from those of the United States. Financial information included in this document was extracted from financial statements prepared in accordance with Brazilian accounting standards that may not be comparable to the financial statements of United States companies. None of the U.S. Securities and Exchange Commission, or any state securities commission, has: approved or disapproved the Offer; passed upon the merits or fairness of the Offer; or passed upon the adequacy or accuracy of the information contained in this document. Holders of Shares and/or ADSs should be aware that, prior to and/or during the period of the Offer, the Offeror (as defined below) and/or its affiliates, directly or indirectly, may bid for or make purchases of or make arrangements to purchase Shares, or related securities, in each case as permitted by applicable law and regulation in Brazil. State Grid Brazil (as defined below) will announce any such bids for, purchases of, or arrangements to purchase Shares or related securities outside the Offer that are made prior to the expiration of the Offer by causing CPFL Energia S.A. to publish notice thereof by material fact in Brazil and by causing CPFL Energia S.A. to publish comparable disclosure thereof in the United States on Form 6-K. Holders of Shares and/or ADSs in the United States should be aware that the disposition of their Shares and/or ADSs may have tax consequences both in the United States and in the Federative Republic of Brazil. Such consequences for holders who are resident in, or citizens of, the United States are not fully described fully herein and such holders are encouraged to consult their tax advisors. BANCO SANTANDER (BRASIL) S.A., a financial institution with headquarters in the City of São Paulo, State of São Paulo, at Avenida Presidente Juscelino Kubitschek, nº 2.041 and 2.235 (Bloco A), enrolled with the Taxpayer Identification Number ("CNPJ/MF") under No. 90.400.888/0001- 42, as the leading intermediary institution ("Santander") and BANK OF AMERICA MERRILL LYNCH BANCO MÚLTIPLO S.A., a financial institution with headquarters in the City of São Paulo, State of São Paulo, at Avenida Brigadeiro Faria Lima, nº 3.400, 18th floor, enrolled with the CNPJ/MF under number 62.073.200/0001-21 ("BofA Merrill Lynch" and, together with Santander, "Intermediary Institutions"), on account and at the order of STATE GRID BRAZIL POWER PARTICIPAÇÕES S.A., a privately held company with headquarters in the City of São Paulo, State of São Paulo, at Avenida Paulista, nº 726, conj. 1207, room 04, enrolled with the CNPJ/MF under No. 26.002.119/0001-97 ("State Grid Brazil" or the "Offeror"), a subsidiary of STATE GRID INTERNATIONAL DEVELOPMENT LIMITED., a corporation dully incorporated under the laws of Hong Kong with headquarters in Suite 1304, 13F Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong ("State Grid"), hereby announces to the shareholders that own issued and outstanding common shares, including common shares represented by American Depositary Shares ("ADSs"), issued by CPFL ENERGIA S.A. (collectively, "Shares"), a public corporation with headquarters in the City of São Paulo, State of São Paulo, at Rua Gomes de Carvalho, nº 1.510, 14th floor, conj. 02, enrolled with the CNPJ/MF under No. 02.429.144/0001- 93, with its corporate acts registered with the São Paulo Board of Trade under NIRE nº 35.300.186.133 ("Company" or "CPFL"), the public tender offer to acquire up to all the Shares (the "Offer" or the "Tender Offer"), considering the transfer of control of the Company, according to article 254-A of Law No. 6,404, dated as of December 15, 1976, as amended ("Law 6,404"), under the provisions set forth in this Notice of Public Tender Offer for the Acquisition of Common Shares issued by CPFL Energia S.A. ("Notice"), according to (i) Law No. 6,385, dated as of December 7, 1976, as amended ("Law 6,385"), (ii) Law 6,404, (iii) the Company´s by-laws, and(iv) the Novo Mercado Listing Rules of B3 S.A. - Brasil, Bolsa, Balcão ("B3" and "Novo Mercado Rules"), and subject to the rules of the Comissão de Valores Mobiliários ("CVM") Instruction No. 361, dated as of March 5, 2002, as amended ("CVM Instruction 361"), pursuant to the following terms and conditions.
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OFFER
Notice Information: This Notice was prepared with information provided by the Offeror (unless where stated expressly otherwise) in order to comply with CVM Instruction 361, providing the shareholders of the Company with elements deemed necessary to take an informed and independent decision regarding the acceptance of the Offer.
Background: On July 1, 2016, as disclosed by CPFL, pursuant to a material fact on such date, one of its then-controlling shareholders, Camargo Corrêa S.A. ("CCSA"), received a proposal from State Grid for the acquisition of the totality of the shares of CPFL held directly or indirectly by CCSA that were bound to CPFL's shareholders' agreement dated as of March 22, 2002, as amended ("Shareholders' Agreement").
In this regard, CCSA and State Grid entered into a binding Letter Agreement in respect of the potential acquisition, by one or more State Grid affiliates incorporated under the
laws of Brazil, of two hundred and thirty-four million, eighty-six thousand, two hundred and four (234,086,204) shares issued by CPFL and owned by CCSA's subsidiary, ESC Energia SA ("ESC"), that were bound to the Shareholders' Agreement ("ESC Shares"), representing, approximately, 23% (twenty-three percent) of CPFL's capital stock.
As disclosed by a material fact issued by CPFL on September 2, 2016, CCSA, ESC, State Grid and State Grid Brazil executed a Share Purchase Agreement ("SPA") on September 2, 2016, the terms and conditions of which provide for: (i) the direct or indirect sale (through the sale of shares representing 100% (one hundred percent) of ESC's capital stock) of the ESC Shares, for the acquisition price of twenty five Reais (R$25.00) per share of CPFL ("Original Price per Share"); and (ii) the direct sale, also at the Original Price per Share, of five million, eight hundred and sixty-nine thousand, eight hundred and seventy-six (5,869,876) shares issued by CPFL and held directly by CCSA, that were received as share dividends (bonificação em ações) on the shares bound to the Shareholders' Agreement, representing, approximately, 0.58% (fifty eight hundredths percent) of the capital stock of CPFL ("CCSA Shares"). Also on September 2, 2016, State Grid announced its intention to commence this Offer, assuming that the transaction closing ultimately occurred with respect to a sufficient number of CPFL shares.
Under the terms of the SPA, the Original Price per Share was subject to the following adjustments: (i) the sum of approximately R$0.001879503 (corresponding to 80% (eighty percent) of the consolidated net profit per share of CPFL for the fiscal year ended December 31, 2015 divided by 366) per day, from and including January 1, 2016 to and including the closing date of the Transaction (as defined below); and (ii) the subtraction of any amount per share distributed by CPFL to its shareholders as dividends or other cash distributions (or declared by CPFL to its shareholders) on or after January 1, 2016 and prior to the closing of the Transaction (except for the cash dividend declared on April 29, 2016).
The SPA also set forth certain conditions precedent to the completion of the Transaction, among which were obtaining necessary approvals from the Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica) ("CADE") and from the National Electric Energy Agency (Agência Nacional de Energia Elétrica) ("ANEEL"). In accordance with the provisions of the Shareholders' Agreement, following the execution of the SPA, CPFL's shareholders that were parties to the Shareholders' Agreement were entitled to exercise either (a) their right of first refusal to acquire all of the shares subject to the Transaction that were bound to the Shareholders' Agreement; or (b) their tag along right to sell alongside CCSA and CCSA's relevant subsidiaries, all of the shares issued by CPFL held by them that were bound to the Shareholders' Agreement, as well as the share dividends received on such CPFL's shares as from January 1st, 2016, at the same per share price, and subject to the same conditions offered to CCSA.
On September 22, 2016, CPFL disclosed a material fact informing that the decision of the CADE General Superintendent (Superintendente Geral do CADE) was published in the Official Gazette of the Brazilian Government, approving, without restriction,
CPFL Energia SA published this content on 31 October 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 31 October 2017 18:47:05 UTC.
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