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EDP shares up 9% after China Three Gorges launches €9B takeover bid

EDP - Energias de Portugal SA shares rose more than 9% on May 14 after China Three Gorges Corp. launched a €9.07 billion all-cash tender offer for the 76.7% stake in EDP that it does not already own, the Financial Times reported.

CTG's offer for the Portuguese electric giant of €3.26 per share is 4.8% higher than the company's May 11 closing price on the Lisbon stock exchange of €3.11. CTG will also make a mandatory bid for renewables developer EDP Renováveis for €7.33 per share, according to a Bloomberg report, which is lower than its May 11 closing share price of €7.85.

Chinese renewable energy developer CTG owns 23% of EDP, and its bid would give it control of the Portuguese company. News of the offer emerged after market close May 11.

Deal completion is subject to several regulatory approvals including the U.S. Committee on Foreign Investment's approval, but the Portuguese government may not weigh in.

"The government has nothing against it, no reservations," Portugal's Prime Minister Antonio Costa said May 11, before the bid was made public. He reportedly had signaled that he would not interfere in any takeover approach for EDP, of which acquisition speculation has been circulating for months, and would leave it to shareholders to decide.

Other major EDP shareholders include U.S. financial services company Capital Group with a 12% stake, China's state-owned CNIC with an approximately 5% interest, and private equity firm BlackRock Inc.

EDP serves about 10 million power and 1.6 million natural gas customers and owns over 330,000 kilometers of transmission lines, with a market capitalization of approximately €11.4 billion as of May 11. In the U.S., according to S&P Global Market Intelligence data, the company owns more than 3,800 MW of operating power generation capacity, almost all of which is wind, with almost 3,000 MW more under construction or in development.