Brazil's CPFL Bids For Elektro To Expand Distribution -Report

CPFL Energia SA (CPFE3.BR, CPL), Brazil's biggest nongovernment utility, has made an offer to buy distributor Elektro as part of efforts to boost earnings, Folha de S. Paulo newspaper said Tuesday.

The offer, estimated by analysts to be between 5 billion and 7 billion Brazilian reals ($3 billion-$4.2 billion), is competing against bids from Cia Energetica de Minas Gerais (CMIG4.BR, CIG) AES Corp (AES) and Neoenergia (GNAN3B.SM), Folha said. CPFL controls eight distributors in Brazil, accounting for about 13% of the market, and seeks to expand. Beyond Elektro, it sees few acquisition targets up for sale, Folha said, citing CPFL President Wilson Ferreira.

Ferreira declined to say how much CPFL was offering for Elektro, which operates in the interior of Sao Paulo state, Folha said.

Ferreira said that the purchase of Elektro is more interesting to the company than a merger with Neoenergia because the latter operates in the Brazilian northeast while CPFL is focused in the southeast, Folha said.

CPFL and Neoenergia both have Previ, Brazil's biggest pension fund, as a shareholder. Previ reportedly is seeking a merger of the two companies. Ferreira said he hasn't been involved in merger talks, Folha reported.

-By Paulo Winterstein, Dow Jones Newswires; 55-11-3544-7073; paulo.winterstein@dowjones.com

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