Brazil: Procedures For Public Tender Offers For Brazilian Real Estate Investment Fund Units

Last Updated: 9 June 2016
Article by Walter Stuber

On May 31, 2016 BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF) issued Circular-Letter No. 050/2016-DP (CL 50), which regulates the procedures applicable to public tender offers for the total or partial voluntary acquisition of units issued by real estate investment funds (Fundos de Investimento Imobiliário – FII) to be executed through auction on the trading system of BVMF.

I. Introduction

The issue of CL 50 meets a demand of the FII industry by regulation of this type of transaction, which is known by the initials of the expression in Portuguese Oferta Pública de Aquisição de Cotas – OPAC. In this regard, the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários CVM), by means of CVM Instruction No. 571, of November 25, 2015, granted to BVMF, as the organized market managing entity, the responsibility of establishing the OPAC's rules and operational procedures.

II. General Provisions

The OPAC will observe the following principles: (i) to be directed without distinction to all holders of units issued by the FII; (ii) to be carried out in such a way as to ensure equal treatment to the recipients, allowing them adequate information as to the background of the FII and the offeror so that the recipients may have the necessary elements to decide about the acceptance of the OPAC; (iii) to be represented by a Full Trading Participant or a Trading Participant authorized to trade by BVMF (the intermediary institution), which should ensure the financial settlement of the OPAC and the payment of the acquisition of remaining units, as set forth in item (x) below; (iv) to be launched with uniform price and payment terms; (v) to be paid at sight and in currency; (vi) to be executed through auction on the trading system of BVMF; (vii) to be allowed the conduct or interference of a competing OPAC formulated by a third party other than the offeror or person linked to the offeror; (viii) to be immutable and irrevocable after the disclosure of the notice, unless: (a) the modification results in improvement of the offer in favor of the recipients; (b) the offeror waives any condition established in the offer for completion of the OPAC; or (c) the modification or revocation is in strict accordance with the terms and conditions set out in the notice; (ix) to be subject to conditions whose implementation does not depend on direct or indirect action of the offeror or any person linked to the offeror; (x) the offeror must assume the obligation to acquire the remaining units for a period of 1 (one) month of the date of the auction, by the final price of the OPAC, updated until the date of effective payment, in the form set out in the notice of the OPAC, if more than 2/3 (two thirds) of the units issued by the FII are held by the offeror or of persons linked to the offeror after the auction of the OPAC; and (xi) the offeror must also assume the obligation to maintain the free float of at least 1/3 (one third) of the units issued by the FII, except in the situation referred to in item (x) above.

III. Prohibition

The offeror, the intermediary institution, the persons linked to them involved in the OPAC, determined or designed, and the persons to whom they are working with or assisting in any way, will be restricted from trading units issued by the FII object of the offer and they shall adopt appropriate procedures to ensure compliance with this restriction.

The prohibition of trading referred to above does not apply to the following situations: (i) negotiation on behalf of third parties; (ii) operations clearly designed to track real estate reference indices; (iii) transactions carried out as a market maker, pursuant to the CVM rules in force; or (iv) discretionary portfolio management.

This restriction is applicable since the protocol of the notice or disclosure to the market of the intention to carry out the offer or the date of the intermediation contract, whichever occurs first, until the close of the auction of the OPAC.

IV. Documents

In order to obtain the request for authorization to perform the OPAC, the intermediary institution must send the following documents: (i) draft of the notice; (ii) copy of the intermediation contract between the offeror and the intermediary institution of the OPAC; (iii) proof of payment of the Examination Fee of the offer (Taxa de Análise da Oferta), pursuant to the Pricing Policy for Issuers and Public Offerings in force; (iv) appraisal report, if the criteria for definition of price has been based on a report; and (v) other documents, depending on the structure of the OPAC.

V. Notice

The notice shall obligatorily contain the following information: (i) identification of the FII and main assets of the fund´s equity, as applicable; (ii) price, payment terms and amount of the units object of the OPAC; (iii) complete data of the offeror and of the intermediary institution of the OPAC; (iv) purpose of the offer; (v) criterion used for defining the price; (vi) terms and conditions of the offer; (vii) procedures for interference or deadline for release of the competing OPAC; (viii) deadline and procedures for enabling the unit holders; (ix) procedures for conducting the auction; (x) data about the FII object of the OPAC, such as: (a) share price of the past 12 months, if applicable; (b) income; and (c) economic and financial indicators; (xi) statement by the offeror on the maintenance or not of any tax benefit, in case of realization of the OPAC; (xii) quantity of units issued by the FII held by the offeror or by persons linked to the offeror; (xiii) statement by the bidder that it will have to pay to the holders of the outstanding units that accept the OPAC the difference, if any, between the price they receive for the sale of their units, updated in accordance with the notice of the OPAC and the legislation in force and adjusted by the changes in number of units eventually occurred, and the price per unit that would be due if it is found within one year of the date of auction of the OPAC, that a new OPAC has been made by the offeror, or by persons linked to the offeror; and (xiv) statements by the offeror and the intermediary institution that they are unaware of the existence of any facts or circumstances, not revealed to the public, that may have relevant influence on the trading prices of the units object of the OPAC.

VI. Competing OPAC

The competing OPAC shall occur within five days before the date of the auction by a price that it is at least 5% higher than the price of the OPAC. The subsequent offers must be at least 1% above the price of the highest bidder registered until then. The competing OPAC will acquire the minimum amount of 10% of the total units of the FII's original offer, except if the original offer is made to acquire more than 2/3 of the units of the FII, in which case the competing OPAC must have the same number of units of the original offer.

The buyer interference at the auction will be allowed, provided that the same conditions applying to the competing OPAC are observed, other than the release of the public notice.

The interested party that it is willing to interfere in the auction shall inform the Chief Operating Officer (Diretor de Operações) at BVMF of its intention, in addition to providing him with information about price, quantity of units and complete data of the interfering party and of the intermediary institution.

VII. Analysis Period

BVMF will have a period of 10 business days to review the notice of the OPAC. The offeror will also have a period of 10 business days from the receipt of the notice analyzed by BVMF to meet the requirements.

After receipt of the notice of the OPAC with the requested changes, BVMF have a deadline of 3 business days to authorize the holding of the auction of the OPAC.

VIII. Auction

After examining the documentation and approval of the final version of the notice, the Chief Operating Officer of BVMF shall authorize the auction be held.

Once the authorization to hold the OPAC is granted, the offeror shall forward the notice to the administrator of the FII, in order to take the following steps: (i) to give notice of the offer to the unit holders, through the disclosure of the notice on the website of the FII; and (ii) to develop and make public a reasoned opinion based on any OPAC for the issuance of units of the FII, covering the following topics: (a) the convenience and opportunity of the offer as to the interest of all unit holders and the liquidity of their units; (b) the impact of the offer on any tax benefits applicable to the FII; (c) strategic plans disclosed by the offeror in connection with the FII; and (d) other points deemed to be relevant.

In the above-mentioned opinion, the FII administrator must express a reasoned opinion favorable or contrary to the acceptance of the OPAC, warning that each unit holder is responsible for accepting or not the OPAC.

The manifestation about the conditions of the offer will have to be made public until five days before the auction. Any manifestation of the FII manager whose units are object of the OPAC, if published by the administrator, shall supply the obligation referred to herein.

IX. Disclosure of the Notice

The deadline for disclosure of the notice is a maximum 15 business days after the approval of BVMF.

The deadline for completion of the auction after the disclosure of the notice is at least 15 and no more than 30 business days.

Should the offer be modified, the date of the auction may be extended if the change occurs after seven business days of the date of publication of the notice.

X. Final Considerations

BVMF may determine at any time: (i) the disclosure of any additional information other than those laid down in CL 50; (ii) the suspension of the OPAC procedure, if it is found that the identified irregularity can be corrected, keeping the suspension until such correction happens; or (iii) the cancellation of the OPAC, if it concludes that the identified irregularity or illegality cannot be corrected.

For the purposes of CL 50, "person linked" means any individual, legal entity, fund or universality of rights representing the same interest of another individual, legal entity, fund or universality of rights.

Consequently, "outstanding units" mean those units which are not owned by the offeror or any person linked to the offeror.

Exceptional situations, omissions or cases not provided for in CL 50 will be decided by BVMF based on the particularities of the fact at hand.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Walter Stuber
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions