Portugal may have paid up to €537m for 19% of REN

Portugal’s government has again declined to disclose the price paid for its latest purchase of shares in REN, the country’s energy grids operator, but ECO calculations suggest the state may have spent as much as €536.6 million to build a 19% stake. The figure matters because the state has said its target holding in REN has now been reached, making the total cost of the intervention relevant for investors and taxpayers.

On Friday, REN told CMVM, Portugal’s securities market regulator, that Parpública had agreed to buy a 5.3% stake from Fidelidade, subject to prior approval by the Tribunal de Contas, Portugal’s audit court. As in the earlier August deal for 13.7% from Pontegadea Inversiones, neither REN’s filing nor the Finance Ministry’s statement disclosed the agreed price. The ministry said only that, “at this stage”, the government considers its objective for a stake in REN to be complete.

The government had already authorised Parpública, in documents sent to the audit court for the first transaction, to acquire up to 20% of REN. In parliament on September 23, Finance Minister Joaquim Miranda Sarmento said Parpública paid €389.8 million for the initial 13.7% stake, equal to 91.7 million shares, or €4.25 per share. He said that price included a premium of about 15% to REN’s average share price over the previous six months, calling such an extra “perfectly” normal.

Using the same approach described by the minister and Refinitiv/LSEG data, ECO estimates a six-month volume-weighted average price of €3.596 per share for the second transaction. Applying a 15% premium would imply a price of €4.125 per share and a cost of about €146.8 million for the 5.3% stake, taking the total for 19% to €536.6 million. Under alternative scenarios, the total would be about €530.2 million with a 10% premium, €523.9 million with a 5% premium, or €515.3 million if the shares were bought at market price.

Originally published at Eco.pt