Chile's Endesa rebuffs sale bid from gas joint venture partner

SANTIAGO, July 25 Thu Jul 25, 2013 12:02pm EDT

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SANTIAGO, July 25 (Reuters) - Leading Chilean electricity generator Endesa Chile said it would not buy out its partner Southern Cross from a gas joint venture, citing too high a price.

Private investment firm Southern Cross Group has been trying to offload its 50 percent stake in power producer and transportation company Gas Atacama.

Endesa and Southern Cross each currently owns half of the Gas Atacama business, which operates a natural gas pipeline and two power generating units with a total installed capacity of 740 megawatts in Chile's mineral-rich north.

But during a conference call on Thursday, following Endesa's quarterly results, the utility's chief financial officer Fernando Gardeweg said the company would not be buying its partner's stake.

Southern Cross was expected to ask $250 million to $300 million for its interest, according to local brokerages and media.

Endesa did not confirm the asking price, but a source close to the company said it was higher than they wanted to pay.

"The price was significantly higher than what Endesa had calculated ... the price offered doesn't add value," the source said.

Southern Cross declined to comment.

Under local regulations, Southern Cross can now try to sell its stake to a third party, but cannot lower the sale price for six months.

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