Portugal's Market Regulator Sets Terms for CTG's EDP Offer

   By Nathan Allen

Portugal's market regulator, the CMVM, on Friday set out the necessary conditions for China Three Gorges Corp.'s proposed takeover of EDP-Energias de Portugal SA (EDP.LB) to proceed.

For the bid to go ahead, EDP's shareholders must vote in favor of scrapping a 25% cap on voting rights at the company's coming annual general meeting, the regulator said. China Three Gorges would then have 45 days to fulfill the other conditions, such as regulatory approvals, to formally register the bid, the CMVM said.

If shareholders reject the proposal the CMVM said it will consider the bid invalid and the takeover won't go any further.

China Three Gorges is already EDP's largest shareholder, with a stake of just over 23%. It launched a 9.07 billion euro ($10.25 billion) offer to acquire the remaining equity last May, but progress has stalled amid concerns from European Union and U.S. regulators, who are wary of ceding control over power-generation assets to China.

EDP's board and activist investor Elliott Management Corp., which holds a roughly 2.3% stake in the company, have also voiced their opposition to the takeover, dismissing the offer as too low.

Rather than accepting the bid, Elliott has pushed EDP's board to focus more on renewables and cut debt by selling off assets.

Bloomberg has reported that CTG is considering withdrawing its takeover bid in favor of smaller alternative deals that wouldn't attract so much regulatory scrutiny, such as pursuing EDP's Brazilian assets.

Write to Nathan Allen at nathan.allen@dowjones.com

(END) Dow Jones Newswires

April 15, 2019 03:32 ET (07:32 GMT)

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