This content is not available in your region

Investor calls on EDP shareholders to block CTG's bid

Access to the comments Comments
Investor calls on EDP shareholders to block CTG's bid
FILE PHOTO: The logo of Portuguese utility company EDP - Energias de Portugal is seen at the company's offices in Oviedo, Spain, May 14, 2018. REUTERS/Eloy Alonso/File Photo   -   Copyright  Eloy Alonso(Reuters)
Text size Aa Aa

By Sergio Goncalves

LISBON (Reuters) – Activist investor Elliott called on Thursday for shareholders in EDP-Energias de Portugal to reject a reform of voting rights, in a move that could scupper a 9-billion-euro (£7.70 billion)takeover offer for EDP from China Three Gorges (CTG).

CTG launched its bid for the utility in May 2018 on the condition that a 25-percent voting right limit was scrapped. All EDP shareholders have to keep to that limit, regardless of the stake they hold.

Elliott, which has an EDP shareholding of 2.9 percent, said it planned to vote against dropping the limit and recommended other shareholders do the same.

The activist investor said it proposed that shareholders vote on the matter during EDP’s general assembly on April 24.

According to Elliott, a no vote would not only “put an immediate end” to CTG’s bid, but also give EDP the “certainty needed to plan for the future”.

The amendment to remove the voting rights limit needs 66 percent shareholder approval to pass.

When China’s state-owned CTG, EDP’s largest shareholder with a 23 percent stake, launched its bid for the company last year EDP’s board rejected the 3.26-euro-per-share offer as too low.

Last month, Elliott proposed an alternative to CTG’s bid, saying EDP could raise 7.6 billion euros from the sale of its Brazilian operation, Iberian thermal holdings and minority stakes in Spanish and Portuguese networks.

“In order to pursue a strategy and a more ambitious plan for the future, EDP needs to overcome the strong uncertainty created by the CTG offer,” Elliott said. “There is a clear consensus among stakeholders today: CTG’s offer in its current form is not in the interest of EDP​.”

CTG’s proposal still needs regulatory approval in a number of countries, including Brazil, the United States, Portugal and the European Union. CTG has halted talks with EU regulators over the proposed takeover, two sources close to the matter said on Jan. 25.

(Reporting by Sergio Goncalves; Writing by Catarina Demony; Editing by Paul Day and Mark Potter)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on for a limited time.