Chinese end talks over bid for Portugal’s EDP
The Chinese government has pulled out of its bid, through China Three Gorges, to take a majority shareholding in EDP.
Talks with European regulators have been ‘suspended’ regarding the takeover bid that was launched on May 1st, 2018.
The offer on the table was €9 billion for the capital of the Portuguese electricity company but regulatory hurdles and consequent sell-offs of subsidiaries raised doubts about the possibility of success.
The Chinese company would have to jump over both European and US regulatory procedures in order to proceed with the takeover bid.
The Portuguese market regulator, CMVM says it is unaware of the bid being withdrawn but an announcement is expected shortly.
China Three Gorges already owns 23.37% of EDP’s stock but its representatives on the board will not have been impressed with recent events, including the legal imperative to pay the special energy tax which the company has been withholding and an end to the free money give away, supported by taxpayers who have been funding a complex and ruinously expensive ‘Contractual Equilibrium Maintenance Cost mechanism’ (CMEC) scheme to provide EDP with much of its net profit in recent years.
As a result of recent events, EDP Portugal will be declaring a loss for 2018, but an overall group profit supported by other of its businesses.
The Chinese offer price per share was €3.26, the shared closed today at €3.01.