(Bloomberg) -- Iberdrola SA, Spain’s largest power company, is considering raising its offer for Brazilian electricity distributor Eletropaulo SA, escalating a bidding war for the AES Corp. unit, according to people familiar with the plans.
Iberdrola’s Neoenergia unit in Brazil may decide at a meeting Friday to increase its bid, according to the people who asked not to be identified because the information isn’t public. Financing is in place to boost it to 30 reais ($8.85) a share and the company could spend more, depending on how much cash it wants to use, the people said. Iberdrola, AES and Neoenergia declined to comment.
Eletropaulo has been a topic of takeover speculation for several years. The competition heated up this month, when Energisa SA offered 19.38 reais a share, a bid that was unanimously rejected by the Eletropaulo board. Whoever ends up buying Eletropaulo will gain an additional 18 million customers in Sao Paulo state, the most populous in Brazil.
Neoenergia offered 25.51 reais a share earlier this week, while Italian rival Enel SpA bid 28 reais a share. Brazilian securities regulator CVM ordered Enel and Energisa SA, which also submitted a bid, to carry out their offers for Eletropaulo jointly on May 18, according to a letter posted Thursday by Eletropaulo.
Spanish newspaper Expansion reported earlier today that Iberdrola was considering raising its bid. Shares of Eletropaulo rose 3.4 percent Thursday to 28.85 reais in Sao Paulo, the highest level since February 2017.
Those who have dropped out of bidding for the company include CPFL Energia SA, a Brazilian power utility owned by State Grid Corp. of China, according to a person familiar.
A deal would further Iberdrola’s expansion into markets outside Spain and comes as the company is working to boost its earnings before interest, taxes, depreciation and amortization by more than 20 percent this year.
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