LISBON (Reuters) – EDP-Energias de Portugal will remain under normal management without limitations usually imposed by takeover rules because these do not apply to the bid by the state-owned, unlisted entity China Three Gorges, market regulator CMVM said on Friday.
CTG last month offered 9 billion euros (8 billion pounds) for the stake it does not already own in the utility, which is Portugal’s largest company by assets.
EDP has said it considered the 3.26 euro a share bid too low but is yet to announce its formal stance on the overall offer.
The CMVM neutrality rules state that, under a takeover by another company, a target firm’s management is limited to day-to-day activities and requires its board of directors be neutral in the bid process, for example barring it from changing the company’s asset base.
However, since the owner of CTG is a third party, in this case the Chinese state, it means the reciprocity principles do not apply and the neutrality rules will be waived, the CMVM said in a statement.
Still, EDP will be required to act in good faith while defending the interests of its shareholders, the regulator said, adding it took the decision after being approached by EDP, which argued that its management should not be subject to limitations
CTG owns a 23 percent stake in EDP and is its largest shareholder.
When CTG announced the bid it sought to buy at least 50 percent of EDP voting capital plus one vote for the offer to succeed, but it has since said it reserved the right to waive that condition, meaning it could just increase its stake in EDP without taking full control.
EDP shares were 0.5 percent higher at 3.36 euros at midday, underperforming the broader market in Lisbon, up 1.5 percent.
(Reporting by Andrei Khalip; Editing by Edmund Blair)