CoolPass: Spain’s Iberdrola bids $3.5 bln for shares in renewables unit.

March 8, 2011 - PRLog -- CoolPass has learned from a regulatory filing, that the Bilboa, Spain based utility giant is offering 0.499 share for each of its publically traded Iberdrola Renovables SA unit, equating to a 10% premium on the day’s closing price.

Spain’s biggest power company is taking advantage of a 48% drop in its unit since the initial public offer to consolidate ownership at a low price, according to Madrid-based strategist Francisco Salvador.

“The level at which it was trading was absurd,” Salvador informed CoolPass during an
interview. “Since the market wasn’t recognizing its value, the deal has a certain logic.”

Clean-power generators have fallen from grace since Spain rewrote subsidy laws for existing plants and rival installations burning fossil fuels in the U.S. were given a boost by increased shale gas supplies. The renewables unit recently slashed its planned investment in new capacity globally by over 33% through 2012 in order to maintain its profit margins.


Iberdrola said this was due to shifts in the price of energy, slower progress in regulation and reduced investment opportunities, both at home and in the U.S., CoolPass learned from a presentation filed with the stock market regulator.  According to the firm the transaction will dilute earnings per share by 1.5% and will boost profit growth.

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