EDP shareholders to decide China Three Gorges takeover bid

Leading shareholders and board members at Portugal’s energy giant EDP will decide today to accept of reject a takeover bid from Chinese power utility China Tree Gorges.

Nine questions will be settled at the Board General Assembly meeting which is considered to be one of the most important meetings in the company’s history.
The meeting, in addition to dealing with routine matters such as profits and agreeing dividend payouts, will also elect a new Chairman of the Assembly and decide on the future of the Public Acquisition Offer launched 11 months ago b CTG.
Item 1 on the agenda concerns the financial results of 2018, a year in which profits fell 53% to €519 million compared to 2017.
Contributing towards these negative results was the performance of the Portuguese market which recorded a loss for the first time in 20 years due to regulatory costs (excluding EDP Renewables).
On the other hand, record profits from EDP Brasil and Renewables helped to put the brake on further losses.
Despite poor performance in terms of profits, shareholders will receive the same dividends as last year of 19 cents per share.
In addition to the shareholders’ payout, EDP will use remaining profits to expand the business (particularly on renewables) and reduce its debt in line with the strategy outlined by CEO António Mexia.
António Mexia himself will continue to be the best-paid CEO from all the companies listed on the PSI-20. Despite getting 3.91% less on his salary, he will still earn around €2.2 million per annum.
The two last points on the agenda will determine the future of the takeover bid. EDP has not has a Chairman of the General Assembly since July 2018 when António Vitorino left that post to take up an appointment as General Director of the International Organisation for Migrations.
It is expected that Luís Palha da Silva, current CEO of Pharol, will be appointed to the vacant post.
It will also be decided if the Chinese shareholders CTG and CNIC (both held by the Chinese State) can vote with a majority of votes — almost 30% — or if it will be limited to a ceiling of 25% laid out in statutes.
On Monday China Three Gorges stated that it would not change the terms of its takeover bid for EDP, meaning that if shareholders reject a voting rights reform today the $10Bn bid will fall.