LISBON/PARIS (Reuters) - Shares in Portuguese utility EDP jumped as much as 12 percent early on Monday, topping a bid price offered on Friday by China Three Gorges (CTG), indicating that the market believes there could be a counter bid or a higher offer from the Chinese state-owned utility.
That values the proposed deal at 9.07 billion euros ($10.83 billion), excluding the 23 percent stake CTG already owns.
Analysts say the CTG's bid is relatively low compared to other recent Chinese bids for European energy assets, where Chinese bidders have offered top dollar to outbid European utilities and infrastructure investment funds.
EDP management has also not commented.
CTG and another Chinese state company, CNIC, together hold 28.25 percent of EDP shares. With full control of EDP and its renewables unit EDPR , CTG would become one of the top European renewables players, with a large presence in the United States and Brazilian markets.
But other shareholders may balk at CTG's low bid.
Institutional investors hold major stakes in EDP, including Capital Research with 12 percent, Masaveu Herrero with 7.19 percent, BlackRock with 5 percent, Mudabala Investment with 4.06 percent and Capital World with 2.69 percent, ThomsonReuters data showed.
While funds may hold out for a higher price, analysts doubt the European Union could do much to block the deal, even if the acquisition of a strategic European energy asset raises eyebrows in the industry.
He added that full control of EDP would strengthen China's hand in talks with the EU about exporting renewable energy production assets.
Already dominant in solar panels, China is now pushing ahead in wind turbines. Chinese turbine maker Goldwind last year sold more turbines worldwide than Vestas , although the Danish firm still installed more capacity, according to WindPower Monthly.
"It raises the question of reciprocity. The opposite move would not be possible," he said, adding that for European firms it would be hard even to buy an individual power plant in China, let alone mount a hostile bid for a utility.
With another Chinese state-owned firm, State Grid of China, owning 25 percent of Portugal's state power network REN, China is also getting around European unbundling legislation, which forced utilities to sell their grids in a drive to reduce their market dominance.
(Writing by Geert De Clercq, additional reporting by Sergio Goncalves; editing by Jason Neely)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)