SPANISH construction group ACS revealed yesterday that it has held talks to sell a controlling stake in Union Fenosa – and plans to use the profits to raise a holding in rival Spanish utility and ScottishPower-owner Iberdrola.
The news sent shares in all three companies soaring, but analysts questioned the reasoning behind any the move.
Debt-laden ACS said it had talked to various European energy groups over selling its 45.3 per cent stake in Union Fenosa in order to ra
ise its 12.5 per cent stake in Iberdrola, Spain's largest utility by market value.
However, it said it had reached no deal so far.
The move would mean giving up a controlling stake from which ACS receives a percentage of profits to increase a stake in a company which it does not control and from which it only receives dividend payments.
"This, we think, would increase the perception of ACS as just a holding company," said Alejandra Pereda of Morgan Stanley.
She estimated selling the Union Fenosa stake at 12.72 (£10.07) per share would net a post-tax profit of 820 million, allowing ACS to buy just 2 per cent more of Iberdrola.
An ailing Spanish construction market and tightening global credit has put pressure on ACS to sell its corporate holdings, such as its 30 per cent in German builder Hochtief and 25.8 per cent in Spanish toll road operator Abertis.
Iberdrola ended the day 4.71 per cent up at 8.45, while ACS rose 9.6 per cent to 31.06 and Union Fenosa added 16.44 per cent to 13.60.
Earlier this year, EDF held talks with ACS about launching a joint bid for Iberdrola.
The full article contains 290 words and appears in The Scotsman newspaper.
