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Case TIM


TIM

In: 2001

In a Material Fact published on May 5, 2011, the administrative body of TIM Participações (TCSL3 and TCSL4) informed the market of the merging of the two types of shares which it was trading on the São Paulo Stock Exchange (Bovespa) and the migration of the new type of share to the Novo Mercado segment.

This fact would bring the holders of these shares (which would come to be traded under the ticker ‘TIMP3’) a series of benefits: the policy of merged dividends, increased liquidity and a 100% tag along.

In the same document, the company published the exchange ratio proposed for the conversion: 0.8406 of an ordinary share for each preferential share. This proportion was based upon the weighed average for market prices of ordinary and preferential shares during the 60 days prior to the publication (including May 4).

In line with the best practices of Corporate Governance, the company guaranteed the right to withdraw to the shareholders of TCSL4 for towage of the approval of the merging of the types of shares, as established in Art. 137 – I of Law 6.404/76, since the substance (preference, advantages and conditions) of the preferential shares would be the subject of change once they migrated to ordinary status.

Moving ahead, the proposal would have to be approved by both the preferential and the ordinary shareholders at separate assemblies. The controlling shareholder would have a majority of the votes at both assemblies, but opted accept the vote of minorities, voting along the decision of minorities.

On June 22, an EGM was held which, with the participation of 80% of the ordinary shareholders, approved the company’s entry into the Novo Mercado, the exchange ratio and a full review of the company’s by-laws (aligning it with Novo Mercado practices).

The minutes of the meeting state: “It is registered that TIM Brasil, controlling shareholder and holder of 77.15% of the company’s issued ordinary shares, accompanied the vote proffered by the holders of ordinary shares who are not part of the controlling block of the company, agreeing with their votes following the closure of the addition of all the minority shareholders’ votes, simply in order to guarantee that the decisions taken by the other shareholders present satisfied the quorum established by Article 136 of the Corporate Law”.

On the same day, a Special Assembly of the Preferential Shareholders (AESP) was held, with more than 80% of the holders of this type of shares in attendance. Approval exceeded 99%. According to the minutes: “It is registered that TIM Brasil, controlling shareholder and holder of 77.15% of the company’s issued preferential shares, accompanied the vote proffered by the holders of ordinary shares who are not part of the controlling block of the company, agreeing with their votes following the closure of the addition of all the minority shareholders’ votes, simply in order to guarantee that the decisions taken by the other shareholders present satisfied the quorum established by Article 136 of the Corporate Law”.

As of August 3, TIM shares started being traded directly on the Bovespa Novo Mercado segment under the ticker TIMP3. The operation was well-received by the market since the controlling shareholder did not try to increase his share to the detriment of the minority shareholders. Corroborating this point of view, one good example which should be highlighted is that the company’s shares showed an increase in their value of 13% as of the date the operation was announced through until the day immediately prior to the merger (from May 4 to August 2) – during the same period Ibovespa recorded performance of -10%.

Read more about it:


TIM – Fato Relevante – Novo Mercado.pdf
TIM ata novo mercado jun2011.pdf




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