ACS targets 25% of Iberdrola

Published on Sunday 3 December 2006 01:44

ACS, the biggest shareholder in the Spanish utility group Iberdrola, is preparing to lift its stake close to 25% if Iberdrola's £12bn bid for ScottishPower is successful.

The Scottish group, headed by Philip Bowman, last week recommended a bid from Iberdrola which was initially valued at 777p per share. Wind farm builder ACS is keen to gain a decisive stake in the combined business, which would be the world's biggest renewable energy company.

ACS's 10% stake in Iberdrola will be diluted to 8% if the deal goes through, but ACS chairman Florentino Perez, a former Real Madrid chairman, has been given the green light by Spain's competition authorities to lift his company's stake to 24.9% once ScottishPower is acquired.

Sources in Spain claim that Iberdrola is preparing to sell various assets in order to finance the move. The company may sell its property division or its stakes in Energias de Portugal or Galp Energia, the Portuguese oil and gas group.

The SNP wants the EC to block Iberdrola's bid for ScottishPower on the basis that Spain's tax treatment of acquisitions, which would benefit Iberdrola by about 900m, amounts to illegal state aid.