SAO PAULO (Bloomberg) — Bermuda-based Cosan Ltd., parent of the world's biggest sugar-cane processor, failed to buy back enough shares of its operating unit to delist it in a stock-swap auction on Friday.

Minority investors of Cosan SA Industria e Comercio agreed to swap 16 percent of the outstanding stock for shares of Cosan Ltd., less than the two-thirds required to delist the Brazilian sugar and ethanol maker, the Sao Paulo stock exchange said on Friday in a statement.

Cosan rose to a five-week high earlier yesterday on expectations that the proposal, opposed by minority investors, would fail. Most minority investors rejected the one-for-one swap offer because shares of Cosan Ltd. are worth less and holdings in the Bermuda-based parent company also would give them less say in how the Brazilian operating unit is run.

"In addition to not gaining a premium, a shareholder would be swapping the known for the unknown," Ricardo Tadeu Martins, head of equity research at Planner Corretora de Valores in Sao Paulo, said before the results were announced. "It's not appealing at all."

Cosan SA gained 21 centavos to 27.15 reais in Sao Paulo on Friday, after rising as much as 2.1 percent. Brazilian depositary receipts of Cosan Ltd. fell 2 centavos to 24.28 reais in Sao Paulo, after dropping as much as 3.1 percent earlier.

Cosan Ltd. sought to buy Cosan SA's outstanding shares in exchange for its own US-traded stock or Brazilian depositary receipts as part of a corporate reorganisation plan.

Cosan Ltd. offered one Class A voting stock, Class B Series 2 stock or Brazilian depositary receipt, for each voting share of Cosan SA.

Shareholders of Piracicaba, Brazil-based Cosan SA agreed to swap 18.2 million of their shares.