(Update with closing prices in second paragraph.)
Oct. 25 (Bloomberg) -- Cia. Energetica de Minas Gerais, the state-controlled electricity utility known as Cemig, fell the most in 11 weeks after it bid for a stake in EDP Energias de Portugal.
Cemig declined 3 percent to 26.75 reais at the close of trading, the most since Aug. 8. Brazil’s benchmark Bovespa index slid 1.1 percent.
The company bid for a 21 percent stake in EDP that the Portuguese government is selling, according to a regulatory filing late yesterday. The stake is valued at around 4.6 billion reais ($2.6 billion), Bradesco Corretora wrote in a note to clients today.
“This potential acquisition would be negative for Cemig as we do not believe that the purchase of international assets, mostly in Europe, makes much sense for the company,” Bradesco Corretora analysts Vladimir Pinto and Marcelo Sa wrote. “Moreover, Cemig’s current balance sheet is not strong enough to support such a sizable acquisition.”
Centrais Eletricas Brasileiras SA, Latin America’s largest publicly traded utility, also made an offer for Portugal’s stake in EDP, according to an Oct. 21 filing. Eletrobras, as the company is known, didn’t disclose the financial terms of the offer.
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