Iberdrola Bests Rival Enel With Higher Offer for Brazil Utility
(Bloomberg) -- Iberdrola SA, Spain’s largest power company, raised its bid for Brazilian electricity distributor Eletropaulo SA late Friday, topping an offer made by Italy’s Enel SpA on Thursday.
Iberdrola’s Brazilian unit Neoenergia increased its per-share offer to 29.40 reais ($8.61) from 25.51 reais, according to a statement. Enel said Thursday it would boost a promised capital injection to 1.5 billion Brazilian reais from 1 billion to sweeten its 28 reais-a-share offer. Neoenergia previously pledged a 1.5 billion-real capital injection.
Eletropaulo has seemingly overnight become one of the most sought-after global power assets. With 18 million customers in Sao Paulo state, the richest and most populous in Brazil, the AES Corp. unit serves a region with strong electricity demand and could provide a springboard to the rest of Latin America. It has attracted offers from Europe to Asia.
“For now, Iberdrola is definitely the one winning the game,” Alexandre Montes, an equity analyst at financial research firm Lopes Filho & Associados Consultores de Investimentos, said before the offer was raised, amid reports that Iberdrola could go to 30 reais a share. “Iberdrola has more synergies with Eletropaulo and is willing to pay a higher premium for it.”
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. Iberdrola had the financing for a 30-real-a-share offer and could have spent more, depending on how much cash it wanted to use, people familiar with the plans said Thursday.
Local Brazilian energy company Energisa SA began the competition for Eletropaulo, offering 19.38 reais a share on April 5 in a bid that was unanimously rejected by the Eletropaulo board.
Shares of Eletropaulo rose 0.4 percent to 28.95 reais on Friday. They have gained 61 percent since April 5, the day of the Energisa bid.
Enel has about 10 million customers in Brazil.
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