Brazil's Eletrobras Plans To Make Bid For EDP Stake

Brazil's state-controlled electric utility Centrais Eletricas Brasileiras SA (EBR, ELET6.BR) said Thursday it plans to go ahead with an offer for a stake in Energias de Portugal SA (EDP.LB).

The Brazilian utility, known as Eletrobras, will submit its proposal to Portugal's state-controlled utility on Friday, the deadline for the offers, according to Eletrobras's press office in Rio de Janeiro.

Eletrobras Chief Executive Jose da Costa Carvalho Neto said earlier this month the company would meet with Brazil national development bank BNDES to line up financing, according to reports. At the time, he said Eletrobras didn't plan to sell shares or bonds to finance the purchase. He also declined to give a value for the bid, according to Bloomberg News.

However, this week Eletrobras said it is selling up to $2.5 billion in global bonds. In a note, Standard & Poor's said the bond sale would likely finance operations at Eletrobras subsidiaries.

Another Brazilian company that had previously shown interest in buying an EDP stake, Cia Energetica de Minas Gerais (CMIG4.BR), declined to comment. A person familiar with talks, however, said it is very unlikely the company, known as Cemig, would go forward with an offer.

Cemig, a utility controlled by the government of the state of Minas Gerais, had said it may make an offer by itself or together with Eletrobras. The person familiar with talks said there is a "greater than 80% chance" Cemig won't make an offer.

-By Paulo Winterstein and Luciana Magalhaes, Dow Jones Newswires; 55-11-3544-7073; [e-mail]