May 11, 2018 / 6:09 PM / in 6 months

Trading in Portugal's EDP suspended after reports of likely Chinese bid

LISBON (Reuters) - Trading in the shares of utility company EDP-Energias de Portugal (EDP.LS) was suspended on Friday, as media reported that a Chinese group was set to make a takeover bid for the firm.

FILE PHOTO: Banners bearing the logo of Energias de Portugal (EDP) are seen at the company headquarters in Lisbon, Portugal, December 13, 2011. REUTERS/Jose Manuel Ribeiro/FILE PHOTO

A spokeswoman for Portugal’s market regulator CMVM said the shares were suspended pending an announcement about the company but would not provide more details or comment on media reports.

The online edition of the Expresso newspaper said earlier that a Chinese consortium that includes EDP’s largest shareholder, China Three Gorges (CTG), was preparing a takeover bid for Portugal’s leading company by assets. The Financial Times later quoted its sources as saying CTG was set to launch an all-cash offer for EDP.

Expresso said the Portuguese government was unlikely to create obstacles to the potential takeover, but EDP would probably consider the offer hostile.

EDP had no immediate comment. The company has a stock market capitalization of around 11.4 billion euros ($13.6 billion).

China Three Gorges holds a 23 percent stake and Chinese state company CNIC holds nearly 5 percent, meaning that the Chinese state owns just over 28 percent in EDP. A compulsory takeover offer is required if the stake exceeds 33 percent.

The suspension of EDP shares, which also encompassed EDP’s wind power unit EDPR (EDPR.LS), was announced after the market close on Friday.

EDP shares had closed 0.7 percent higher at 3.11 euros.

Reports and rumors about EDP being an acquisition target of foreign companies have been circulating for months.

Last month, following a news report that French utility Engie (ENGIE.PA) was examining a possible bid, EDP denied the existence of any contact with Engie. There were reports last year that Spain’s Gas Natural GAS.MC was seeking a merger with EDP, but the company denied there were any talks at the time.

China Three Gorges has continued to raise its stake in EDP since reports of Gas Natural’s interest.

($1 = 0.8368 euros)

Reporting By Sergio Goncalves and Andrei Khalip. Editing by Jane Merriman and Susan Fenton

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