The Public Takeover bids launched by state-owned China Three Gorges to obtain shareholder control of Portuguese groups EDP-Energias de Portugal and EDP Renováveis will face “a marathon of authorisations from regulators, almost certain obstacles in Brussels, a management with its own will and a price that has already been considered low,” Portuguese newspaper Observador reported.
The takeover bids, if all the shares are acquired, will require more than 10 billion euros, and come six years after China Three Gorges won the public tender for the privatisation of the share capital of the EDP group still owned by the Portuguese State, of 21.5%.
The newspaper reported that the low price offered of 3.26 euros per share, only 4.8% more than the share price at the end of trading in Lisbon on Friday, could lead to competing bids, including large energy groups from Europe, as well as institutional investors, such as investment funds.
The list of authorisations that need to be obtained for the offer on EDP to go ahead is outlined in the preliminary announcement of the operation released on Friday by China Three Gorges, with a very substantial slice of these approvals from regulators, particularly in the United States, resulting from the operations of EDP Renováveis.
The first one involves the prior registration of the two takeover bids with the Portuguese Securities Market Commission – and it is already known that the stock exchange supervisor has requested further clarification of the announced conditions.
The operation will have to be authorised by the competition authorities, and the China Three Gorges group has said the case will be examined by the Portuguese Competition Authority but also by the European Commission’s Directorate-General for Competition if the proposed concentration has Community implications, considering the assets that the EDP group has in several European Union countries.
The price offered for each share of EDP Renováveis, at 7.33 euros, is “even less attractive,” as it compares with 7.854 euros at the end of trading on Friday, but it is a mandatory takeover bid that has to be launched if EDP, the parent company which controls more than 80% of the capital of EDP Renováveis, changes hands. (macauhub)