LISBON (Reuters) - State-owned power firm China Three Gorges launched its 9 billion euros (7.9 billion pounds) takeover offer for Portuguese utility EDP (EDP.LS) as a pre-emptive move, sensing that other prospective bidders were looking at the company, sources said on Monday.
CTG owns 23 percent of EDP and is bidding for the remainder at 3.26 euros per share, a premium of less than 5 percent over EDP’s price before the offer. The stock leapt 9 percent on Monday, implying the price would go higher.
A source familiar with the matter said EDP viewed the bid as “low” but its board was likely to meet this week to consider it. No decision had yet been made to reject it, the source added.
A banking source close to the matter ruled out any EU utilities launching a counter bid, but that EDP would negotiate with the Chinese and push for a better price and a premium. The source said the offer was not a hostile one.
“CTG is not just a shareholder, it is also a partner of EDP,” said a third source familiar with the offer, noting that the Chinese firm had several large joint ventures with EDP.
The source said the Chinese firm had sensed some potential interest in EDP from European suitors and wanted to make clear its commitment to Portugal’s biggest company. The source declined to give any names of potential rivals.
In addition to its 23 percent stake in EDP, acquired for 2.7 billion euros in 2011, CTG has invested about 2 billion euros alongside EDP in joint power projects around the world.
“Anyone thinking of controlling EDP, whoever it may be, has to deal with this question. CTG has an industrial project with EDP and it has no intention of going anywhere,” said the source familiar with the offer.
Additional reporting by Axel Bugge in LISBON, Pamela Barbaglia in LONDON and Geert De Clercq in PARIS