Fidest – Agenzia giornalistica/press agency

Quotidiano di informazione – Anno 33 n° 335

Elliott Submits Agenda Item for EDP’s Upcoming AGM

Posted by fidest press agency su domenica, 31 marzo 2019

Funds advised by Elliott Advisors (UK) Limited (together, “Elliott”) have requested the addition of an agenda item to the upcoming Annual General Meeting (“AGM”) of EDP – Energias de Portugal, S.A. (“EDP” or the “Company”) – providing shareholders with a vote on one of the key conditions precedent for the takeover bid submitted by China Three Gorges Europe S.A. (“CTG”) in May 2018 (the “Bid”). Elliott believes the proposed resolution – a vote on the amendment of EDP bylaws to lift an existing 25% cap on voting rights – will clarify EDP’s existing situation vis-à-vis the Bid, thus resolving the current impasse and affording EDP a clear pathway forward.Since outlining its views last month on how EDP should invest in growth and optimise its portfolio to deliver superior value, Elliott has been encouraged by the constructive response received from a diverse set of stakeholders. EDP’s Strategic Update presented on 12 March 2019 marked an important first step in the right direction, and while Elliott remains encouraged by this progress, a stronger and accelerated portfolio optimisation plan is ultimately needed to drive sustained value creation and superior growth.To pursue a more ambitious strategy and plan for the future, EDP needs to overcome the significant uncertainty created by CTG’s takeover bid. Today, there exists a clear consensus among stakeholders: CTG’s Bid in its current form is not in the best interests of EDP. The offer price falls far short of what would be required to garner shareholder support.In its own detailed assessment of the Bid published on 8 June 2018, EDP’s Executive Board of Directors itself concluded, “The price offered does not adequately reflect the value of EDP and the implied offer premium is low considering what is customary for European utilities where the offerors have acquired control.” Beyond its failure to reflect fair value, Elliott believes the Bid would also significantly weaken EDP, leaving the Company with a less attractive asset mix and fewer growth opportunities.
On a more practical level, Elliott is not aware of any significant progress on the numerous conditions precedent required for the transaction to proceed, including approval from major anti-trust, foreign investment, energy and other regulatory bodies around the world. Not only have major regulatory bodies not approved the transaction, but CTG has yet to file the necessary applications in most major jurisdictions.Among other key requirements for the Bid, shareholders must amend EDP’s bylaws and lift an existing 25% cap on voting rights. Common in Portugal, the voting cap aims to protect against a large shareholder exerting undue power over a company without paying a premium to shareholders for this effective control. In the case of EDP, lifting the cap would signal support for a takeover by the largest shareholder without a proper premium. If shareholders reject the lifting of the voting cap, the Bid would not meet a required condition precedent. Unless that condition is then immediately waived by CTG, Elliott believes there would be sufficient cause for the Portuguese authorities to terminate the Bid.In its request submitted to the Vice-Chairman of EDP’s Board of the General Shareholders’ Meeting on 27 March 2019, Elliott has therefore proposed an agenda item for the 24 April 2019 AGM, in which shareholders will be able to vote on whether EDP should lift the 25% cap on voting rights of any shareholder, subject to the successful completion of the CTG’s Bid. In calling for this vote, Elliott is making clear that it intends to vote against the resolution and recommends all fellow shareholders do the same. Should the resolution fail to receive a supermajority of two thirds of shareholders present at the 24 April 2019 AGM, the voting cap will remain in effect. Such a result should not only allow for a prompt termination of the Bid in its current form, but will also provide the Company with the necessary clarity to plan for the future.Elliott continues to fully respect CTG’s position as EDP’s largest shareholder, and in any scenario going forward, Elliott recognizes that CTG will have an important role to play in charting EDP’s future. Elliott remains committed to constructive engagement with EDP’s General and Supervisory Board, EDP’s Executive Board of Directors, and its fellow shareholders – including CTG – to advance long overdue reforms that can help secure a brighter future for EDP.


Inserisci i tuoi dati qui sotto o clicca su un'icona per effettuare l'accesso:

Logo di

Stai commentando usando il tuo account Chiudi sessione /  Modifica )

Google photo

Stai commentando usando il tuo account Google. Chiudi sessione /  Modifica )

Foto Twitter

Stai commentando usando il tuo account Twitter. Chiudi sessione /  Modifica )

Foto di Facebook

Stai commentando usando il tuo account Facebook. Chiudi sessione /  Modifica )

Connessione a %s...

%d blogger hanno fatto clic su Mi Piace per questo: