EDP reacts to China Three Gorges takeover bid. “The price does not properly reflect EDP’s worth”

  • ECO News
  • 15 May 2018

The consideration for the takeover bid does not reflect EDP's worth, and the prize is low in comparison the price registered in European utilities for similar acquisition situations.

EDP does not position itself as for or against the Chinese offer, but it assesses the consideration presented by its largest shareholder as low. The Portuguese electricity company states that the 3,26 euros’ consideration does not reflect the company’s worth, and that the price is far from the one usually enforced in the sector of European utilities in similar situations of acquisitions for full control of the company.

“The Executive Board of Directors already initiated the relevant internal procedures for the purposes of complying with the obligations it is legally bound to and shall issue its opinion in due course regarding the other terms of the offer which will be brought to the Executive Board of Directors of EDP’s attention through the release by the offeror of the draft prospectus and launch announcement, which will namely include relevant detail regarding the Industrial Plan”, the company states in a press release sent to CMVM.

“Notwithstanding, the Executive Board of Directors considers that the price offered does not adequately reflect the value of EDP”, the company concludes, confirming the information that had been disclosed by Bloomberg. According to the American North American agency, the company headed by António Mexia is to already be working with the UBS bank for a defense plan.

"The Executive Board of Directors considers that the price offered does not adequately reflect the value of EDP. ”

EDP's Board

China Three Gorges, the largest shareholder in the electricity company, launched a takeover bid on all of EDP’s equity, offering a 3.26 euros’ consideration. The Chinese proposal implied a 4.8% prize in comparison to the previous quotation prior to the takeover bid, of 3.11 euros, although securities quickly surpassed that amount. The session ended at 3.40 euros per share, after suffering the largest increase in a decade, raising by 1.1 billion euros EDP’s market value.