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China Three Gorges launches $10.8 billion bid for Portuguese power firm EDP

Reuters  |  LISBON 

By and Sergio Goncalves

(Reuters) - China's state-owned utility Three Gorges on Friday launched a bid to take control of Portugal's biggest company EDP, offering a premium of just below 5 percent on the power firm's closing stock price.

The total value of the proposed deal is 9.07 billion euros ($10.83 billion), excluding a 23 percent stake already owned by CTG [CYTGP.UL], the Chinese firm and largest shareholder said in a statement issued late on Friday in

Reports that may be an acquisition target of European foreign companies have been circulating for over a year, during which CTG continued to raise its stake, culminating in the 3.26 euros ($3.89) a share offer.

CTG said in its preliminary offer announcement that it seeks to reach at least a 50 percent voting stake plus one share in the company. It also offered 7.33 euros a share for EDP's wind power unit, Renovaveis , below its closing price of 7.84 euros.

EDP had no immediate comment. The of newspaper said earlier that EDP was likely to consider the offer hostile.

If the deal succeeds, it would be the latest in a series of acquisitions by Chinese companies in They have been actively buying assets, from infrastructure to insurance and banking, since Portugal's 2010-13 debt crisis.

EDP is an integrated generator, supplier and distributor of electricity, the largest company by assets in with businesses in , Spain, and the

CTG said it was "fully committed to preserving EDP's Portuguese identity and autonomy as well as its current Portuguese public listing".

told reporters earlier that the had no objections to the bid.

"The government has nothing against it, no reservations," Costa said, adding though that the government does not have to be consulted. "The Chinese have been good investors, be it in REN, EDP or in other sectors ... The important thing is that shareholders can ponder on the project. Let the market work."

The proposed offer may test the European Union's readiness to give control of major infrastructure firms in member states to China, however. It could also run into problems with U.S. authorities since (EDP Renewables) is a major player in its

Another Chinese state company, CNIC, holds a nearly 5 percent stake in EDP, while other leading shareholders include U.S. financial services company Capital Group, with 12 percent, and U.S. private equity firm

EDP's market capitalisation was nearly 11.4 billion euros as of Friday. It has a net debt of 13.8 billion euros.

The company serves almost 10 million power market clients and 1.6 million and runs over 330,000 kilometres (205,000 miles) of power transmission lines.

(Reporting by Andrei Khalip; Editing by and Rosalba O'Brien)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, May 12 2018. 05:16 IST