(Updates with offer details, analysts' comments.)

 
   By Marc Bisbal Arias 
 

Iberdrola SA (IBE.MC) subsidiary Neoenergia S/A (NEOE3B.SM) has raised its offer for Eletropaulo Metropolitana Electricidade de Sao Paulo S/A (ELPL3.BR) by more than 15%, topping a rival bid from Enel SpA (ENEL.MI).

The Spanish utility said Monday that Neoenergia--in which Iberdrola holds a majority stake--increased its offer to 29.40 Brazilian reais ($8.61) a share from BRL25.51.

Iberdrola aims to buy 67.7 million Eletropaulo shares in a primary offering and then launch a takeover bid for up to 100% of Eletropaulo, bringing the overal value of the offer to about $1.84 billion.

After Iberdrola made its original proposal on Tuesday last week, Italy's Enel jumped into the fray with its own offer of BRL28 a share. To improve the attractiveness of its offer, Enel said it would support Eletropaulo's planned capital increase, pushing the value of the bid as high as $1.8 billion.

Eletropaulo distributes and sells electric power in Brazil, where it serves about 18 million people. In 2017, it had gross revenue of BRL21.66 billion.

Analysts at Bankinter last week said Iberdrola's offer was a good move, given that the two businesses complement each other geographically and operate in adjacent areas.

Equita Sim, a brokerage, said that Enel's counter-bid seems expensive, but that it has strong strategic value in part because of the number of potential customers in a highly urbanized area.

 

Write to Marc Bisbal Arias at marc.bisbalarias@dowjones.com

 

(END) Dow Jones Newswires

April 23, 2018 10:36 ET (14:36 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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