Iberdrola overtakes Enel in bidding for Brazilian utility

Iberdrola is on the cusp of acquiring Brazilian electricity distributor Eletropaulo after improving on an earlier offer by Enel last week.

Iberdrola’s Brazilian unit Neoenergia increased its per-share offer to 29.40 reais ($8.61) from 25.51 reais, according to a statement.

According to Reuters, Eletropaulo ‘has seemingly overnight become one of the most sought-after global power assets.’
With 18 million customers in Sao Paulo state, the richest and most populous in Brazil, the AES Corp. unit serves a region with strong electricity demand and could provide a springboard to the rest of Latin America. It has attracted offers from Europe to Asia.

According to analysts Iberdrola has more synergies with Eletropaulo and is prepared to pay a higher premium for it.

A deal would further Iberdrola’s expansion into markets outside Spain and comes as the company is working to boost its earnings before interest, taxes, depreciation and amortization by more than 20 percent this year. Iberdrola had the financing for a 30-real-a-share offer and could have spent more, depending on how much cash it wanted to use, people familiar with the plans said Thursday.

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