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Bloomberg
The bidding war for Brazil’s prized Eletropaulo SA utility is heating up with two European power giants looking to best each other’s bids.
Italy’s Enel SpA said it would increase a promised capital injection to 1.5 billion Brazilian reais ($443 million) to sweeten its 28 reais-a-share offer for the AES Corp. unit. The move came hours after the Brazilian unit of Spain’s Iberdrola SA was said to have the financing to boost its per-share bid to 30 reais from 25.51 reais. It had previously pledged 1.5 billion reais
in capital.
“For now, Iberdrola is definitely the one winning the game,†said Alexandre Montes, an equity analyst at financial research firm Lopes Filho & Associados Consultores de Investimentos. “It’s not possible to neglect the upside of an offer of around 30 reais a share. Iberdrola has more synergies with Eletropaulo and is willing a higher premium for it.â€
Eletropaulo has been a topic of takeover speculation for several years. The competition heated up this month, when Energisa SA offered 19.38 reais a share, a bid that was unanimously rejected by the Eletropaulo board. Whoever ends up buying Eletropaulo will gain an additional 18 million customers in Sao Paulo state, the most populous in Brazil.