Parpública completed the purchase of 13.7% of REN from Pontegadea Inversiones, the investment company of Zara founder Amancio Ortega, for 389.8 million euros, equivalent to 4.25 euros per share. This price incorporates a 15% premium over REN's average share price over the past six months. The Portuguese Government now intends to increase the State's stake to up to 20% in the electricity grid manager.
Should Parpública immediately proceed to purchase an additional 6.3% on the Lisbon Stock Exchange, it would have to pay 147.8 million euros, according to calculations based on a share price of 3.5050 euros. If the State faces the same constraints and has to pay a premium similar to the first transaction, the additional cost would be 179.2 million euros, raising the total investment to 569.1 million euros.
The Government justifies the premium paid with the limited availability of REN's largest shareholders to sell their positions, the reduced liquidity and the governance rights considered relevant. State Grid Corporation of China, the largest shareholder with 25%, has reportedly already been contacted but showed no willingness to sell. In addition to this, there are other significant shareholdings: Fidelidade with 5.3%, the Spanish Redeia Corporación with 5% and Corporación Masaveu with 5%.
REN's free float amounts to 45.3%, and it may be in this portion that the State will find the additional shares needed. The main institutional shareholders include Vanguard Capital, Norges Bank and Blackrock, each with stakes slightly above 1%. The average target price of 10 analysts covering the stock stands at 3.96 euros, representing an upside potential of 13.55% from the current share price.
