12 de octubre de 2014 / 13:37 / en 3 años

UPDATE 2-Spain's Gas Natural to launch $3.3 bln offer for Chile's CGE

* Gas Natural to launch 4,700 peso per share bid for CGE

* Offers comes after deal with CGE controlling shareholders

* Would mark Spanish company’s biggest ever foreign buy

* Offer to be launched Monday, expires Nov. 11 (Adds details on premium offered, context on acquisitions, quotes)

By Sarah White and Anthony Esposito

MADRID/SANTIAGO, Oct 12 (Reuters) - Spain’s Gas Natural on Sunday said it would launch a $3.3 billion takeover offer for Chile’s biggest electricity distributor Compania General de Electricidad (CGE), in a bid to boost its presence in growing Latin American markets.

The Spanish gas and electricity firm’s all-cash offer of 4,700 pesos ($7.90) per share follows CGE’s controlling shareholders agreeing to sell their combined 54.19 percent stake at that price.

As part of the deal with those investors, Gas Natural will launch an offer for the rest of the firm on Monday, marking its biggest ever foreign acquisition if it buys the whole of CGE.

The Spanish company has been looking to push further into Latin America, where it sees growth potential as European economies falter and tough energy reforms in its home market drag on profit.

“With the acquisition of CGE, (Gas Natural) will be present in the energy business in seven of the biggest cities of Latin America,” the Spanish company said in a statement.

“It would allow us to enter Chile’s energy market from a leading position.”

The deal would also be the biggest ever takeover of a Chilean company, after Abbott Laboratories said earlier this year it would buy pharmaceutical firm CFR for $2.9 billion.

Gas Natural’s offer, which will expire on Nov. 11, is at a 72 percent premium to CGE’s average share price over the past 12 months. CGE shares closed at 3,549 Chilean pesos per share on Friday. They had risen 19 percent in the past week, after CGE said it had received several non-binding offers.

CGE services part of Chile’s capital Santiago and distributes about 40 percent of the country’s electricity. It also owns a controlling stake in Chilean gas transporter Gasco SA and has electricity operations in Argentina.

Gas Natural said it needed 51 percent shareholder backing for its CGE offer to go through, though it has already agreed a deal with the company’s controllers, the Marin, Almeria and Perez Cruz families who will back the offer.


Gas Natural unveiled a four-year, 9.2 billion-euro ($11.6 billion) investment plan in late 2013, centered mostly on developing its gas business and on Latin America.

Spanish utilities’ profits have been hurt by industry overhauls aimed at curbing deficits in the country’s regulated power sector, built up after years of mismatched prices and costs. Government measures included a power generation tax and subsidy cuts.

The CGE acquisition will boost Gas Natural’s presence in Chile, where it signed its first contract in May, to supply liquid natural gas from 2016 to the world’s largest copper mine Escondida, which is controlled by BHP Billiton.

Barcelona-based Gas Natural already operates in Mexico, Colombia, Brazil, Argentina and several other central and south American countries.

Its core profit in the first half of 2014 was hit by weaker currencies in Latin America, but it is still putting more focus on its international operations, which generate about 41 percent of earnings before interest, taxes, depreciation and amortisation (EBITA).

Gas Natural is 30 percent-owned by Repsol, though the Spanish oil group has said it could sell that holding. Spanish lender Caixabank also has a 34 percent chunk of Gas Natural.

The company said it did not need fresh financing to back its acquisition.

$1 = 0.7920 euro $1 = 593.5800 Chilean peso Additional reporting by Robert Hetz in Madrid and Rosalba O'Brien and Antonio de la Jara in Santiago, Editing by David Evans

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