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U.S. Energy Consumption Hits All-Time Record

U.S. Energy Consumption Hits All-Time Record

The United States consumed 101.2…

EDP Set To Reject $11B Chinese Takeover Offer

Solar energy

The biggest energy company in Portugal— EDP-Energias de Portugal SA—is expected to reject a US$10.9 billion (9.1 billion euro) offer from its largest shareholder China Three Gorges that seeks to buy the stock it doesn’t already own, because the proposed price is too low, Bloomberg reported on Monday, quoting people with knowledge of the matter.

Late on Friday, China Three Gorges (CTG)—which already owns 23.27 percent in EDP—said that it was offering US$3.907 (3.26 euros) per EDP share in a proposed deal valued at 9.07 billion euro, excluding the Chinese company’s 23-percent stake that it already owns.

EDP’s board could meet as early as this week to discuss the offer, but according to Bloomberg’s sources, the board views the proposed per-share offer as too low and undervaluing the Portuguese company, as it suggests a premium of just 4.8 percent above the Friday close of EDP’s shares.

On Monday, EDP shares in Lisbon surged to above the price that the Chinese are offering, suggesting that investors expect that China Three Gorges may sweeten the offer.

The Portuguese power generation and distribution company is working with advisers that include UBS Group AG on potentially defending itself from the bid, according to Bloomberg’s sources.

Related: Houthi Rebels Fire Missile At Aramco Facility

According to an earlier report by the online edition of the Expresso newspaper, the Portuguese government was not likely to hinder the takeover offer, but the company would likely see it as a hostile takeover bid.

Yet, even if the Chinese sweetened the offer, a potential takeover would need the approval of the European Union competition authorities, which could be reluctant to cede control of a major energy company to China. A deal could also be blocked in the U.S., because the U.S. is the biggest market in terms of installed capacity and production of EDP’s renewables unit—EDP Renováveis.

By Tsvetana Paraskova for Oilprice.com

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