EDP raises $2.4 bln in renewables unit IPO

LISBON (Reuters) - Energias de Portugal EDP.LS raised 1.568 billion euros ($2.43 billion) in the initial public offering of 25 percent of its renewable energy unit, in Europe's largest IPO so far this year, the company said on Monday.

It priced shares in the IPO of EDP Renewables, the world’s fourth-largest wind power company, at 8 euros per share, in the bottom half of its 7.4 euros to 8.9 euros price range.

EDP said the 20 percent allocated to institutional investors was 6.1 times oversubscribed, and 5 percent for the public was 87.9 times oversubscribed.

The new shares will start trading on Wednesday.

At 0900 GMT on Monday EDP shares were off 1.11 percent at around 4 euros.

“The slight decline reflects the fact that the IPO price is at the bottom half of the price range,” said an analyst who asked not to be named.

EDP is hoping to develop alternative energy at a time of record oil prices and has said it wants 67 percent of its electricity production to come from alternative energy by 2015, up from 39 percent currently.

EDP Renewables' IPO comes a few months after Spanish utility Iberdrola IBE.MC offered 20 percent of its renewable unit, Iberdrola Renovables IBR.MC, in an initial public offering.

The 5.30 euros per share price in the IPO of Iberdrola Renovables, the world’s largest renewable energy firm, valued it at 22.4 billion euros at its launch in December. The price was also at the bottom of its initial range.

For EDP Renewables, the 8 euro price values the whole company at 7.2 billion euros. A few weeks ago two analysts had seen the enterprise value of EDP’s renewable unit at between 8.9 billion euros and 11 billion euros.

The analyst said on Monday EDP Renewables had similar valuations to Iberdrola Renovables, with the Portuguese firm priced at an enterprise value of 19 times EBITDA for 2008 and Iberdrola Renovables at between 16 and 17 times.

EDP hopes to reach installed wind power capacity at EDP Renewables of 7,600 megawatts (MW) by 2010, up from 3,640 MW at the end of 2007.

EDP has quickly built up its wind power business and it now has wind parks in countries including Spain, Portugal, France and Poland. In the United States, EDP bought Horizon Energy from Goldman Sachs for $2.2 billion last year.

Underwriters in the operation are Portuguese banks BES Investimento, Caixa BI and Millennium bcp Investimento and Morgan Stanley, UBS, Citigroup, Deutsche Bank, JP Morgan, Merrill Lynch, Societe Generale and Santander.

Reporting by Axel Bugge and Sergio Goncalves; Editing by Sue Thomas