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Portugal's electricity company EDP on Tuesday rejected as too low a takeover bid by its current largest shareholder, Chinese energy behemoth Three Gorges.
Energias de Portugal (EDP), one of the country's largest businesses, said in a statement it would comment at a later date on the other terms of an offer put forward by the Chinese giant on Friday.
"Notwithstanding, the executive board of directors considers that the price offered does not adequately reflect the value of EDP," the statement said.
If Three Gorges finally succeeds in fully acquiring EDP, it would mark a significant move as China's steps up its overseas investment drive.
EDP's share price already jumped 9.3 percent on Monday on the Lisbon stock exchange on the news of the bid. And the share continued to climb on Tuesday, adding another 1.82 percent at 3.46 euros.
Three Gorges, which already owns 23 percent of EDP and is now aiming to take full control, is offering EDP shareholders a price of 3.26 euros per share, a 4.8-percent premium over the closing price on Friday.
The Chinese group has also launched a takeover offer for EDP's renewables branch, EDP Renovaveis, at 7.33 euros per share, while the unit's shares were changing hands at 8.06 euros on Tuesday.
The Portuguese financial press cited analysts and investors as saying they also viewed Three Gorges' offer as being too low.
Beyond the financial side of the deal, the political implications would be huge.
"While the deal has a chance to succeed, it could also encounter some political hurdles," ING Research analysts said in a note.
While the Portuguese government has already said it would not obstruct the deal, according to ING, the EU and the United States may oppose a takeover by the Chinese government of a major European utility.
tsc/ser/spm
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