EUR 1.3 BN DEAL - EDP Bids $1.4 Billion for Remaining Stake in Renovaveis Unit
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EDP Bids $1.4 Billion for Remaining Stake in Renovaveis Unit
- Utility offers 6.8 euros per share for 22.5% of EDP Renovaveis
- EDP will use part of the Naturgas sale’s proceeds to fund bid
By Henrique Almeida
(Bloomberg) --Portuguese utility EDP-Energias de Portugal SA is offering 1.3 billion euros ($1.4 billion) to buy the 22.5 percent stake it doesn't already own in renewable-energy unit EDP Renovaveis SA.
The nation's biggest power company is bidding 6.8 euros for each EDP Renovaveis share, Lisbon-based EDP said in a regulatory filing on Monday evening. That's 8.5 percent higher than the renewable-energy unit's closing stock price on Monday.
EDP said in a separate statement it will use part of the proceeds from the sale of Spanish natural gas distribution unit Naturgas to fund the bid for EDP Renovaveis. It's selling Naturgas to a group of investors including the Abu Dhabi Investment Council and Swiss Life Asset Managers. EDP said it expects the Naturgas sale will result in a net capital gain of about 700 million euros in 2017.
The purchase of the remaining stake in EDP Renovaveis “is aimed at reinforcing EDP's strategy as a leader in energy generation through renewable sources, EDP said in the filing.
Former Portuguese power monopoly EDP has been spending on new dams and wind turbines as it tries to rely less on oil and coal. EDP said in May 2016 that it plans to invest 1.4 billion euros on average every year through 2020 as it adds onshore wind energy capacity in the U.S. and in other markets.