(Bloomberg) -- State-backed Shanghai Electric Power Co. has emerged as the lead bidder for a controlling stake in K-Electric Ltd., the $2.4 billion Pakistani utility, according to people familiar with the matter.
The Chinese company has submitted the highest bid for buyout firm Abraaj Group’s 66 percent stake, the people said, asking not to be identified as the information is private. A deal could be announced in the coming weeks, though no final agreement has been reached and the parties are still negotiating final terms, they said.
K-Electric shares rose 4.7 percent to 9.21 rupees at 12:48 p.m. in Karachi trading Thursday after earlier jumping as much as 5.1 percent, the biggest intraday gain since Aug. 5. The benchmark KSE 100 Index rose 1.3 percent.
If Shanghai Electric’s bid for the stake, which has a market value of about $1.6 billion, is successful, it will be the utility firm’s largest overseas transaction. The company said last month that it was interested in Abraaj’s holding. K-Electric had also drawn interest from Chinese clean-energy group Golden Concord Holdings Ltd., French utility Engie SA and at least one investment fund, people with knowledge of the matter said last month.
K-Electric, formerly known as Karachi Electric Supply Co., serves more than 2.2 million customers in and around the Pakistani city and employs about 11,000 people, according to its website. Emerging markets-focused buyout firm Abraaj, with about $10 billion of assets under management, invested in K-Electric in 2009, according to its website.
Representatives for Shanghai Electric Power and K-Electric didn’t immediately respond to e-mails seeking comment, while a spokeswoman for Abraaj declined to comment.