Brazil's Eletropaulo shares soar as Enel, Iberdrola vie for control

SAO PAULO (Reuters) - Brazilian power distribution company Eletropaulo Metropolitana SA's ELPL3.SA shares soared on Tuesday after the company disclosed two rival takeover bids from European energy firms.

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Italy’s Enel SpA has offered to pay 28 reais per Eletropaulo share, the two companies said.

Enel's offer came hours after Neoenergia SA NEOE3B.SO, controlled by Spain's Iberdrola SA IBE.MC and Brazilian pension funds, said it would pay 25.51 reais per share.

Shares in Eletropaulo jumped 24 percent to 27.30 reais on Tuesday afternoon trading in Sao Paulo.

Enel, an Italian utility that has invested in fast-growing Latin America to offset sluggish European markets, said in a statement that its investment would total up to around 1.1 billion euros ($1.4 billion).

“The transaction is in line with the Enel Group’s current strategic plan and, if successfully executed, would mark another step forward in strengthening the group’s presence in the Brazilian distribution sector,” it said.

Eletropaulo is the power distributor in Brazil’s largest and richest metropolitan area, Sao Paulo, and is one of the few private utilities that is up for sale.

According to Eletropaulo’s security filing, Enel’s offer would be conditional on Eletropaulo canceling a previously proposed share issue.

Earlier on Tuesday, Eletropaulo announced its board had approved the issue of 58.9 million new shares, equivalent to a 26 percent stake.

Neoenergia’s rival offer includes the commitment to buy that stake, paying 25.51 reais per share. Eletropaulo had agreed to sell the stake to Neoenergia as long as other investors do not bid higher than the 25.51 reais, according to the filings.

If it succeeds in acquiring the minority stake, Neoenergia said it would acquire the rest of Eletropaulo’s shares, at a total cost of 5.7 billion reais ($1.7 billion).

Eletropaulo said in the filing its board was analyzing Enel’s offer with its financial advisers.

Reporting by Tatiana Bautzer, editing by Susan Fenton and Rosalba O’Brien