China Three Gorges’ bid for Energias de Portugal may come to an end on Wednesday

23 April 2019

The takeover bid for the entire share capital of Portuguese power group EDP – Energias de Portugal will be without effect if voting rights reform are not approved by the group’s general meeting, said state group China Three Gorges.

“Concerning the proposal by Elliot International, LP and Elliot Associates … and the statement issued by the CMVM on 12 April 2019, CTG would like to irrevocably declare to all interested parties and in particular to EDP shareholders that all the conditions to which the Offer is subject remain in force and, specifically, if the result of the vote does not allow the elimination of the current limit on the number of votes, CTG will not waive this condition,” CTG said.

This position is set out in a letter sent by CTG Europe chairman Wu Shengliang to the deputy chairman of EDP’s general shareholder meeting, Rui Medeiros, published through the Portuguese Securities and Exchange Commission (CMVM).

The Chinese group said it will “respect the decisions made by the authorities and the general meeting,” and that, “it will remain as EDP’s long-term strategic investor and will continue to contribute as a strategic partner to the sustainable development of the company regardless of the final outcome of the Offer.”

CTG, through this market filing, requested that it be read at the general meeting on 24 April.

On 12 April, CMVM warned that if EDP’s shareholders rejected the Elliot fund’s proposed changes to voting rights at the general meeting, there is a “non-verification” of one of the conditions for registering the CTG group’s bid for EDP, so the operation will not go ahead.

The regulator of the financial markets said that the exception would be, “if the offeror [CTG] exercises the power to waive that condition,” which Tuesday’s statement from CTG’ concludes.

The EDP group announced on 1 April that the Elliot fund, holder of 2.01% of EDP’s share capital, had been required by the vice-chair of the general meeting to introduce a new item on the agenda so that shareholders should vote on the possible elimination of the 25% limit on voting rights. (Macauhub)