Portuguese state visit fuels EDP takeover rumours

China Three Gorges' (CTG's) new chairman accompanied Chinese president Xi Jinping on a state visit to Portugal this month raising speculation the event would be used to facilitate the group's attempt to acquire a majority stake in developer EDP.

EDP Renovaveis' Maple Ridge wind farm in New York, US
EDP Renovaveis' Maple Ridge wind farm in New York, US

A memorandum of understanding (MoU) between CTG and EDP was one of 17 agreements forming a joint government declaration "reinforcing the two countries’ global strategic partnership".

The MoU, however, was limited to cooperation in fulfilling "social responsibilities".

It follows CTG launching a takeover bid for EDP in May. CTG is, however, prepared to take a majority stake, according to a filing on the Portuguese stock exchange.

The takeover bid "is proceeding with complete normality" and that "no specific results were ever expected to be achieved by December", EDP CEO António Mexia said.

He added that "nothing special" could be expected from the president’s visit.

"I don’t think the visit will affect what is a highly complex operation which is not dependent only on the Portuguese authorities", Helena Barbosa, analyst with Caixa BI, told Windpower Monthly.

She added news which emerged a month ago "giving notice of lowered Chinese interest in the bid may be nothing more than one Bloomberg report".

Detailing the company’s third quarter results last month, EDP’s António Mexia promised an update on strategy and more details about the acquisition bid in the new year.

A Portuguese newspaper’s claim that CTG formalised the acquisition of a 30% stake in EDPR’s Moray East offshore wind farm during the visit was denied by an EDPR spokesman.

He told Windpower Monthly "the information is incorrect and no stake in Moray has been sold to CTG".

China’s state-owned companies CTG and CNIC (China Ningbo International Corporation) between them currently hold a 28.25% stake in EDP.

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