By Brazil Stock Guide — The technical staff of Brazil’s securities regulator, the CVM, has recommended waiving the requirement for a mandatory tender offer for shares of Oncoclínicas (ONCO3) in a proceeding reviewing Centaurus Capital’s stake in the company. The recommendation, however, does not end the dispute between the group linked to the asset manager and minority shareholders.
The opinion was cleared by Luis Miguel Sono, head of the CVM’s securities registration department, known as SRE. The recommendation can still be challenged before the CVM’s board of commissioners, which would have the final word if minority shareholders file an appeal.
The technical staff concluded that there is evidence indicating Centaurus had already held an indirect stake of more than 15% in Oncoclínicas since 2018, before the company’s IPO. Based on that reading, the SRE found that there was no entry of a new shareholder and no new acquisition capable of automatically triggering the company’s mandatory tender offer clause.
The dispute involves a Brazilian-style poison pill provision in Oncoclínicas’ bylaws, designed to protect shareholders when an investor crosses a specified ownership threshold. In Oncoclínicas’ case, that threshold is 15%.
The opinion is expected to be challenged. Minority shareholders who argue that a tender offer is mandatory say the corporate reorganization involving Centaurus and the Josephina III fund changed the company’s economic ownership structure and should give other shareholders the right to sell their shares under the terms set out in the bylaws.
The case for a tender offer was supported by investors such as Latache and by the Brazilian Association for Investment, Credit and Consumption, known as Abraicc, which advocates for minority shareholders.
Centaurus, for its part, argued that it did not become a new shareholder in 2024 because it had already held a relevant indirect exposure to Oncoclínicas before the IPO. The CVM’s technical staff accepted that argument.
The recommendation issued on Tuesday closes, at the technical-staff level, a dispute that has lasted more than a year. In the opinion, the SRE concluded that the corporate reorganization through which Centaurus came to directly hold 31.83% of Oncoclínicas’ shares falls under the bylaw exception that exempts pre-IPO shareholders with relevant stakes from the obligation to launch a tender offer.
The technical staff adopted what it described as a “teleological interpretation” of the bylaws. According to the document, the exception “was clearly inserted into the Bylaws with the purpose of exempting from the obligation to launch a tender offer the two groups that stood out in that structure, namely Centaurus and Goldman Sachs.”
A teleological interpretation considers the purpose of a rule, not only its literal wording. In this case, the technical staff understood that the bylaw exception was created to preserve the position of groups that were already relevant before the IPO, such as Centaurus and Goldman Sachs, and not to require them to launch a tender offer in the event of a later corporate reorganization.
In the opinion, the CVM’s technical staff also defended its authority to interpret bylaw provisions as part of its regulatory analysis. Its conclusion was that the complaints filed by minority shareholders did not justify imposing a mandatory tender offer.
The recommendation reduces, in the short term, the risk of a multibillion-real tender offer involving ONCO3, but it keeps open a sensitive regulatory front for the company and its main shareholders. According to people involved in the case, the potential impact of the offer could reach R$6 billion.
For minority shareholders, the dispute goes beyond the interpretation of the bylaw clause. They also question how the proceeding was conducted, the time taken to review the case, access to documents, and the role of outside legal opinions submitted by professionals with previous ties to the CVM on behalf of parties involved in the dispute.
Revolving Door
Minority shareholders also question the handling of the proceeding. One of the points they cite is an entry in e-Agendas, Brazil’s official federal meeting-disclosure system, referring to a May 11 meeting with partners at Mattos Filho, the law firm representing funds linked to Centaurus. According to minority shareholders, the record indicated the presence of officials from the technical area involved in the analysis of the case. The CVM has said that Sono did not attend the meeting and that the agenda entry was later corrected.
The episode was taken to the CVM’s internal affairs office, Brazil’s federal internal-control agency, the CGU, and the Federal Audit Court, known as TCU, under allegations of partiality in the handling of the case. For minority shareholders, the fact that the technical staff signed, on the same day, Internal Memorandum 52 recommending that their appeal not be reviewed reinforces the need for the case to be examined by the CVM’s board of commissioners.
Another point of contention involves access to documents in the proceeding and the participation of legal experts with previous ties to the CVM. Among them is Otavio Yazbek, a former CVM director who acted as a consultant in the interest of Centaurus and whose legal opinion was cited as a basis for the technical staff’s recommendation.
For minority shareholders, the presence of former CVM officials in a dispute of this size reopens the debate over the so-called revolving door between regulators and regulated entities.
Outside legal opinions are common in complex corporate disputes, especially when there are disagreements over the interpretation of bylaws, shareholder rights, and tender offer obligations. In the Oncoclínicas case, however, the issue has become part of the minority shareholders’ strategy to seek greater scrutiny of how the proceeding has been handled.
The possibility of an appeal to the CVM’s board of commissioners keeps the case open. Until then, the SRE opinion is a signal in favor of Centaurus’s position, but it does not eliminate the regulatory, corporate, and legal risks surrounding the dispute.