Wednesday January 30, 07:15 PM
Iberdrola rises on report of possible EDF takeover bid
By Olivier Thibault
 |
MADRID (AFP) - Shares in Iberdrola (Madrid: BIB.MC - news) , Spain's second-biggest energy utility, closed higher Wednesday following a report that its core shareholder ACS (Madrid: ACS.MC - news) and France's EDF (Paris: FR0010242511 - news) are mulling a joint bid for the firm.
The Financial Times reported earlier Wednesday that the two companies had held preliminary talks with a view to buying Iberdrola, the second-biggest energy utility in Spain.
The newspaper, which cited political and investment bank sources, also said Spanish Prime Minister Jose Luis Rodriguez Zapatero and French President Nicolas Sarkozy were aware of the talks between the companies.
It said EDF, Europe's largest power producer, and Spanish builder ACS, may divide up the company if their bid is successful.
Iberdrola closed up 3.58 percent at 9.56 euros, easing from a session high of 9.98 euros and was the most-traded share in the benchmark Ibex-35 index which closed up 0.22 percent. Trading in Iberdrola was briefly suspended.
The possibility of a hostile takeover bid for Iberdrola comes several months after E.ON's failed offer for Endesa (ENDESA.SN - news) , which was ultimately bought by Italy's Enel (Milan: ENEL.MI - news) and Spanish builder Acciona with Madrid's blessing.
In a short statement, Spanish builder ACS stressed no deal had been reached with EDF but it did not specifically deny the existence of the talks on Iberdrola.
"ACS advises that it has not reached a deal with EDF to make a takeover bid for Iberdrola," the statement sent to Spanish market regulator CNMV said.
The company already has 12 percent of wind energy specialist Iberdrola and owns about 45 percent of Union Fenosa SA, Spain's third-largest power company.
Spanish Industry Minister Joan Clos said an alliance between ACS and EDF to seek control of Iberdrola was a "pure hypothesis" and denied the government had any knowledge of takeover plans involving the two firms.
An EDF spokesman mewanhile said the firm was "surprised about the proliferation of takeover rumours at a time of very volatile markets."
The French company -- recently linked to a takeover of Germany's number two power firm RWE (Xetra: 703712 - news) -- has expressed its interest in the Spanish market several times before.
Goldman Sachs (NYSE: GS - news) saw the deal as value enhancing for EDF as it would reinforce its presence in Britain while also giving it an entry into the Spanish market.
But analysts said Iberdrola (Madrid: IBE.MC - news) -- which in April completed a takeover bid for Scottish Power (LSE: SPW.L - news) worth 17.1 billion euros (25.3 billion dollars) -- was in a strong position to counter a takeover offensive.
Iberdrola chairman Ignacio Sanchez Galan quickly expressed his hostility to any plan to divide up the company.
"To create a company like Iberdrola takes 106 years," he told reproters during a visit to a Spanish power plant, the web site of daily business newspaper Cinco Dias reported.
Iberdrola's acquisition of Scottish Power, Britain's fifth-biggest gas and its sixth-biggest electricity provider, helped make the firm Europe's fourth-largest electricity provider by market capitalization behind EDF, German's E.ON and France's Suez (Paris: FR0000120529 - news) .
During the first nine months of last year, Iberdrola posted a net profit of 1.6 billion euros, a 30.5 percent increase over the same period in 2006.
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
