April 20, 2017 / 8:18 PM / in 2 years

Hedge fund Ecofin says EDP bid for renewable energy unit 'egregiously low'

LONDON (Reuters) - London hedge fund firm Ecofin said an offer from Portugal’s largest company EDP (EDP.LS) to buy 22.47 percent of subsidiary EDP Renovaveis (EDPR.LS) “significantly undervalues” the company, in a letter to EDPR’s board seen by Reuters.

EDP offered 6.80 euros ($7.29) a share to minority shareholders and said it aims to delist the company which was priced at 8 euros in its Initial Public Offering in 2008.

The $2 billion hedge fund, which focuses on sustainable investing, said it was “impossible” to consider this offer full and fair in the letter to EDPR’s board.

Ecofin urged all shareholders not to accept this “egregiously low” offer and said there was no possible reason for the independent directors to recommend the offer.

A spokesman at Ecofin declined to reveal the size of the hedge fund’s stake in EDPR.

An EDP spokesman declined to comment about the views of Ecofin. EDPR is the world’s fourth-largest wind-generated electricity producer.

($1 = 0.9329 euros)

Reporting by Maiya Keidan; Editing by Elaine Hardcastle

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