China's CTG bids EUR 9.1bn to take control of Portugal's EDP

Chinese state-owned utility China Three Gorges Corp (CTG) said Friday it has decided to launch a voluntary cash tender offer for the shares it does not own in Portuguese utility Energias de Portugal SA (ELI:EDP).

The EUR-9.07-billion (USD 10.8bn) offer will be made through China Three Gorges (Europe) SA. More specifically, CTG is offering EUR 3.26 per share, which represents a premium of almost 5% over EDP’s closing stock price of EUR 3.11 on the Lisbon stock exchange on Friday.

CTG also made an offer to buy EDP Renovaveis SA (ELI:EDPR) at EUR 7.33 per share. EDP holds a 82.6% stake in the renewable energy company, which at the end of March managed a global portfolio of 11 GW.

The Chinese firm, which currently owns 23.27% of EDP, stated that its offer for the latter will be subject to a minimum acceptance threshold in order for CTG to reach 50% plus one share of the target's voting rights.

CTG says it is fully committed to preserving EDP's Portuguese identity and autonomy, as well as its public company status. The Portuguese government has no objections to the bid, Prime Minister Antonio Costa said to journalists on Friday.

BofA Merrill Lynch has been appointed financial advisor to CTG, whle Linklaters and SLCM - Serra Lopes, Cortes Martins & Associados provided legal advice to the Chinese company. Millennium Investment Banking serves as Portuguese financial intermediary.

(EUR 1 = USD 1.19)

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