Spanish utility company Iberdrola is reportedly considering selling its real estate unit to help finance a EUR 17.2 bn bid for Scottish Power, according to a report in Spain's business daily Expansion. The newspaper said Iberdrola's chairman Ignacio Sanchez Galan has been opposed to the sell-off up to now because he felt buyers would not pay a high enough price for the real estate arm, which has assets valued at EUR 12.7 bn.
Spanish utility company Iberdrola is reportedly considering selling its real estate unit to help finance a EUR 17.2 bn bid for Scottish Power, according to a report in Spain's business daily Expansion. The newspaper said Iberdrola's chairman Ignacio Sanchez Galan has been opposed to the sell-off up to now because he felt buyers would not pay a high enough price for the real estate arm, which has assets valued at EUR 12.7 bn.
The board of Scottish Power, a major British energy supplier, has backed an EUR 17.2 bn bid from Iberdrola in a move that would create Europe's third-largest utility group. In the event the deal goes ahead. The deal is below the EUR 12 a share that had been mooted ahead of the formal offer. However, a counter bid seems unlikely. The German utility company RWE ruled itself out of the race this week, while another potential interested party, SSE, said earlier this month that it was not going to become embroiled in a bidding war.
Iberdrola said the deal is in line with its long-term strategy. 'The new group will be well positioned for the future European energy market, particularly in renewable energy, a sector in which it will be a world leader'. The group has secured debt finance of almost EUR 11,9 bn, arranged by ABN Amro, Barclays Capital and Royal Bank of Scotland.
