(Reuters) – Portugal's market regulator CMVM gave China Three Gorges (CTG) an ultimatum in its search for EDP-Energias in Portugal, warning that its attempt to acquire the largest company in Portugal could fail if a reform was rejected Two voting rights this month.
In a clarification to the market of China's state CTG power giant, CMVM said that if the motion to eliminate a voting limit of 25 percent is rejected at a meeting of the EDP general assembly on April 24, it could ruin the offer
Investor activist Elliott, who has a 2.9 percent stake in EDP and has proposed an alternative to CTG's offer, has asked EDP shareholders to refuse voting reform.
"A possible rejection by the shareholders of the proposal to change voting rights would imply the non-confirmation of one of the conditions for the launch and registration of the EDP offer … which would imply its extinction," said CMVM. CTG launched its bid for utility in May 2018 with the condition that a 25 percent voting limit limit be eliminated. The shareholders of AllEDP have to maintain that limit, regardless of the participation they hold. When CTG, the largest shareholder of EDP with a 23 percent stake, launched its bid for the company last year, the EDP board rejected the offer of 3.26 euros per share as low.
CMVM said that although the voting limit limit was modified on April 24, CTG will be notified that it has 45 days to complete the conditions – principally regulatory approvals – necessary to formally launch the public offer.
Some analysts questioned the probability of CTG of moving ahead with the offer due to the long delay to formally launch it from the first announcement in May last year.
Elliott said the rejection of the vote reform would not only "end immediately" with CTG's offer, but would also give EDP the "certainty needed to plan the future."
The alternative plan of Elliott of EDP to the offer of CTG is based on a proposal to raise 7.6 million euros by the sale of its Brazilian operation, its Iberian thermal reserves and its participation in Spanish and Portuguese networks. EDP could then focus on continuing to develop its alternative energy business.
By Sergio Goncalves and Axel Bugge; Edition of Susan Thomas