|Company requests buyback due to takeover bid|
GVT Holding S.A. requested authorization for a private buyback operation under the terms of article 23 of Instruction 10/80. As stated in a release already disclosed to the market, the company explained that the entirety of its share capital may become the object of a voluntary takeover bid (OPA). The company also explained that, under the terms of the company’s stock options program, should the aforesaid bid take place, the options’ maturity period would be anticipated to allow option holders to participate in the bid by selling the shares obtained by exercising their stock options at this opportunity.
Given this, the company is seeking a structure that will allow, at the same time: 1) the program’s participants to exercise their respective stock options early in order to participate in the takeover bid; and 2) returning the stock option program to its pre-bid status, should the bid never take place. This would prevent the program’s participants from gaining an undue benefit at the expense of other shareholders who would unjustifiably have their stakes diluted.
This structure would be implemented by issuing the shares resulting from early exercise of the stock options together with a call option in favor of the exercisable company should the OPA not take place, for the same price applied during early exercise. Given that in principle, the buyback would take place through private operations that are banned by article 9 of Instruction 10/80, the company is requesting the CVM’s authorization to carry out the operation, under article 23 of the same Instruction.
The Board authorized the private operation requested by GVT Holding S.A., pointing out in its decision that the buyback price applied by the company, being lower than market price, does not harm shareholders and is justifiable in this case, considering that its only purpose it to enable undoing an early exercise of stock options should the bid not take place. (PROC. RJ2009/10676; Reg. no. 6736/09; Rapporteur: SEP)