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CTG powers up for EDP battle
Posted on Monday, 14 May 2018 10:09
EDP was up 10.7 per cent at 09:24 local time in the first day of trading after China Three Gorges (CTG) offered to acquire the remaining 76.7 per cent not already held in the Portuguese utility for roughly EUR 9.14 billion.
In a statement released at the end of trading on 11th May, the existing shareholder put forward an all-cash proposal set at a discount of 4.8 per cent, or EUR 3.26 apiece, to the last unaffected closing price.
Recent media reports are focusing on the fact the offer “looks deliberately ungenerous”, as Bloomberg out it, probably because CTG is not actually aiming to acquire all 100.0 per cent of EDP.
In the statement, the state-owned clean energy utility said it wants to increase its current 23.2 per cent equity interest, representing 23.2 per cent of exercisable voting rights, to at least 50.0 per cent plus one share.
EDP’s current list of stockholders includes CNIC, incidentally another China-owned entity with a 4.9 per cent stake, Capital Group Companies, BlackRock, Qatar Investment Authority and Mabadala Investment, among others.
The proposal values the entire Portuguese electricity company, which has operations in Brazil, Spain and the US, at EUR 11.92 billion.
However, the deal may run up against competition, or regulatory or political hurdles, including one from the Committee on Foreign Investment in the US, considering the current trade tensions between the two countries.
At the time of the statement, people told the Financial Times the majority shareholder is viewing the Portuguese group as a springboard for further growth in the international renewable power segment.
The newspaper added chairman Lu Chun insist CTG is “strongly committed to preserving EDP’s Portuguese identity, with headquarters in Lisbon and status as a public listed company in the Lisbon stock exchange”.
© Zephus Ltd