TXU backs bid for Spain's Cantabrico

EDP-Electricidade de Portugal SA (EDP) and Spanish savings bank Caja Asturias bid 2.7 billion euros ($2.5 billion) for Hidroelectrica del Cantabrico Thursday, joining a list of potential buyers for the Spanish power company. TXU Europe currently owns over 21.7 million shares, a 19.2% stake in Cantabrico, and is supporting the EDP-Caja Asturias bid.


EDP-Electricidade de Portugal SA (EDP) and Spanish savings bank Caja Asturias bid 2.7 billion euros ($2.5 billion) for Hidroelectrica del Cantabrico Thursday, joining a list of potential buyers for the Spanish power company.

EDP and Caja Asturias, already a Cantabrico shareholder, offered 24 euros/share in cash, higher than Ferroatlantica's 19 euros/share existing offer. EDP said combining with Cantabrico would create potential savings on fuel purchases, operations, and maintenance.

TXU Europe, a unit of TXU Corp. failed to buy Cantabrico last year after offering 21.25 euros/share. It has committed itself to supporting the joint offer even if a higher one emerges. TXU Europe said the EDP-Caja Asturias bid gives it certainty over its exit from Cantabrico at 24 euro ($21.91) per share. TXU Europe currently owns over 21.7 million shares, a 19.2% stake in Cantabrico. Cantabrico's other current big shareholder, Belgium's Electrabel, owns 10%.

TXU Europe's commitment gives the partners 19% of the shares in addition to Caja Asturia's 10% and 5% held by another savings bank, Caser, which also backed the bid.

EDP would take 40-50% of Cantabrico and use the company as a springboard into Spain, while Caja Asturias wants 30%, leaving the rest for existing shareholders or new partners, the companies said in a joint statement.

Consolidation in Spain's fast-growing power market includes a plan by Endesa SA and Iberdrola SA to merge.

Last year, the Spanish government blocked Spain's Union Fenosa from buying Cantabrico, complaining it would damage competition. Regulators also warned off France's Electricite de France from moving into Spain on the grounds it was publicly controlled. EDP is 30% owned state-owned.

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