Cielo, Brazilian Payments Giant, Moves to Delist Stock Amid Shareholder Dispute

Cielo S.A., the Brazilian payments company controlled by major lenders Banco do Brasil SA and Banco Bradesco SA, has initiated a process to remove its stock from the market. The move comes after shareholders rejected a proposal at a special meeting that sought a new valuation for a tender offer the company was floating.

The company's ownership structure reveals a complex web of business interests, with the largest shareholders being public companies holding around 59% of the shares. Institutional investors, including banks, also have a significant stake in Cielo, indicating their confidence in the company's performance. However, the top two shareholders, Banco do Brasil and Banco Bradesco, hold a majority ownership, giving them substantial influence over the company's decisions.

The banks had initially offered 5.35 reais ($1.04) per share to take full ownership of Cielo, which was later raised to 5.60 reais per share. Some minority shareholders were requesting an assessment from another financial firm, but the proposal was voted down at the special meeting. This rejection cleared the path for the banks to proceed with the delisting process.

Why this matters: Cielo's move to delist its stock is part of a broader trend across firms to integrate their acquiring businesses with banking services. The decision has significant implications for the Brazilian payments industry and the company's future growth strategies.

Despite the ongoing shareholder dispute, Cielo's shares have risen more than 18% year-to-date, outperforming the benchmark Ibovespa index. The general public also holds a 25% stake in the company, which can impact its policies and future direction.

As Cielo navigates the delisting process, the company's performance and the outcome of the shareholder dispute will be closely watched by various interested parties in the Brazilian business community. The move to consolidate ownership under the major banks is expected to streamline decision-making and align the company's strategies with its controlling shareholders' interests.

Key Takeaways

• Cielo, a Brazilian payments firm, is delisting its stock after shareholders rejected a tender offer.
• Cielo's largest shareholders are Banco do Brasil and Banco Bradesco, holding a majority stake.
• The banks had offered 5.60 reais per share to take full ownership, but some shareholders sought a higher valuation.
• Cielo's delisting is part of a trend to integrate acquiring businesses with banking services.
• The public holds a 25% stake in Cielo, which can impact its future direction despite the delisting.