China Three Gorges in $10.7bn bid for EDP

China Three Gorges (CTG) has announced the launch of a $10.7bn (€9bn) bid for Portugal’s EDP.

The offer was conditional on CTG reaching a minimum acceptance of 50 per cent plus one share of EDP’s voting rights. Upon completion, CTG would be obliged to launch a mandatory offer for the 17 per cent of shares in EDP Renovàƒ¡veis, the Portuguese company’s listed renewables subsidiary, not controlled by the parent.
The all-cash tender offer for the 76.7 per cent of EDP that CTG does not already own would value each share at €3.26, a 5.5 per cent premium to Thursday’s closing price of €3.09 and 17.9 per cent above the average for the past six months. It would value the whole group at €11.8bn, or about €25.6bn including net debt.

The FT reports that the move is likely to be monitored by the US, where the deal would require approval from the Committee on Foreign Investment in the US (Cfius), providing a test of Washington’s attitude to Chinese dealmaking at a time of trade tensions between the Trump administration and Beijing.

à‚ CTG’s existing 23.3 per cent stake stems from a €2.7bn deal with the Portuguese government in 2011 that completed the privatisation of EDP in the wake of the country’s bailout by the EU and the IMF. E

Lu Chun, chairman of CTG, said the company was “strongly committed to preserving EDP’s Portuguese identity, with headquarters in Lisbon and status as a public listed company in the Lisbon stock exchange”.

CTG was hopeful of political support in Portugal after a successful six-year partnership during which EDP’s finances have stabilised.à‚ 

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