China Three Gorge's takeover bid to EDP is hindering the company's growth, says Elliot Fund, one of the shareholders.
Elliott Fund, which has less than 3% of EDP, has taken its first position regarding the takeover bid by China Three Gorges. And it’s a negative one.
“It is clear to us that CTG’s bid does not favor the best interests of EDP’s stakeholders. The return is too low, the process is paralyzed, and the changes likely to be required by CTG’s offer would be based on regulatory requirements rather than the best interests of all stakeholders. At this point, the continuation of the existence of an offer that is considered impossible to complete successfully, in its current form, is hindering EDP’s growth. We believe that EDP must quickly surpass the Offer and take steps to define a new course of action, urgently “it can be read in a letter sent to the General and Supervisory Board, led by Luís Amado.
The takeover bid to EDP was launched in May at 3.26 euros per share and the process has been dragged ever since. So far, the Chinese have not yet successfully registered the offer in Brussels, a necessary condition for the operation to get to the market. But so far, no shareholder had yet taken a stance on the offer, whether it was in terms of the value of the offer or its industrial design. This changes now.
“In any scenario, CTG will always play an important role in defining EDP’s future path. However, it is clear to us, and to many other shareholders, that CTG’s offer, as it currently stands, does not favor the best interests of EDP’s stakeholders and, ultimately, will lead to a weakening of EDP, which will become a more volatile company with a less attractive set of assets and fewer growth opportunities. “