Latin America: EPM to bid against Brookfield for Gas Natural unit

27 April 2018 - 12:00 am UTC

Empresas Públicas de Medellín (EPM) announced on 26 April that its board had approved a controlling bid for gas distribution company Gas Natural. 

EPM said it would seek financing for a share tender offer or a competing tender offer to that of Brookfield, according to the announcement published on the Colombian Stock Exchange (BVC).

Gas Natural is majority-owned (59.06%) by Spain’s Gas Natural Fenosa through its subsidiary Gas Natural Internacional. 

The next largest shareholder is public utility Empresa de Energía de Bogotá (EEB) with a 25% stake. EEB has declared that it is not interested in selling its shares. 

Brookfield Infrastructure Partners (BIP) said in its FY17 earnings call on 9 February that it would seek to increase its 11% stake in Gas Natural Fenosa’s local distribution company.

Brookfield and its institutional partners acquired the 11% stake in December for CAD 105m (USD 81.56m) with Brookfield contributing CAD 30m.

In that announcement, BIP CFO Bahir Manios said: “This will include a private purchase of the remaining interest held by the largest shareholders, as well as a minority tender offer for the remaining minority interest.”

According to the Canadian institutional investor’s results, this would imply an equity investment of about USD 600m to acquire nearly 100% ownership – including USD 170m from BIP and the rest from unspecified institutional partners.

Brookfield is understood to have made an offer of COP 72,696 (USD 26.68) per share in early April. 

 

EPM