Iberdrola powers ahead on takeover speculation
The shares of Iberdrola rose sharply on Wednesday following a report that Electricitè de France and ACS are in preliminary talks to launch a joint bid for Spain's second-biggest electricity company.31 January 2008
MADRID - The shares of Iberdrola rose sharply on Wednesday following a report that Electricitè de France and ACS are in preliminary talks to launch a joint bid for Spain's second-biggest electricity company.
Iberdrola's stock closed up 3.58 percent at EUR 9.65 after a high of EUR 9.98. Its renewables energy unit Iberdrola Renovables added 3.68 percent to EUR 5.35.
The Financial Times quoted investment bankers as saying that ACS, which is Spain's largest builder, and EDF would carve Iberdrola up, with the state-controlled French utility getting Iberdrola's unit Scottish Power and a 5-10 percent share of the Spanish electricity market. ACS would get Renovables, which would be folded into Spain's third-biggest electricity supplier Unión Fenosa. ACS controls Fenosa, whose stock added 5.49 percent yesterday.
In a brief statement, ACS said it had not reached any agreement with EDF to launch a takeover bid.
In response to the report, Iberdrola Chairman Ignacio Sánchez Galán said: "We don't need intermediaries to sell the company in pieces; what we need is people to build the company up more.
"If at any point the shareholders want to carve Iberdrola up, we know perfectly well how to do so."
The FT said that French President Nicolas Sarkozy and Spanish Prime Minister José Luis Rodríguez Zapatero were aware of the talks between EDF and ACS. It said ACS had also informed senior members of the opposition Popular Party in an effort to convince them not to make the talks a political issue ahead of general elections slated for 9 March.
Industry Minister Joan Clos said he was unaware of any contact between Spain and France regarding a possible bid for Iberdrola by EDF and ACS.
Spain has run foul of the European Commission for intervening in the takeover last year of Endesa, the country's largest electricity company. Brussels is expected today to announce further legal proceedings against Madrid for usurping its exclusive right to vet European cross-border mergers and acquisitions.
Separately, Iberdrola announced it had sold its 3.83-percent stake in Portuguese oil company Galp Energia for EUR 478 million, making a gain of about EUR 370 million from the deal
[Copyright EL PAÍS / A. SIM 2008]
Subject: Spanish news