Qatar’s sovereign wealth investment fund is buying 6.1 percent of Spanish utility Iberdrola for 2.2 billion euros.
The sale of new shares will help Iberdrola finance its Brazil operations and pay off some of its 24 billion euros of debt.
It is also a defensive move against the takeover efforts of Spanish building firm ACS which holds about 20 percent of Iberdrola and plans to buy more shares.
Qatar Holdings is now challenging ACS’s expansion plans on two fronts. The Gulf state’s sovereign wealth fund has also taken a 9.1 percent stake in ACS’s other buyout target, German builder Hochtief
Iberdrola shares gained, defying analysts’ expectations that they would fall on news of the dilution.
“I think this is a case of sell on the rumour, buy on the news. The market was expecting moves to dilute ACS, but this one also gives Iberdrola a potent core shareholder who will defend its management’s interests,” a Madrid-based broker said.