Reuters/Madrid

Wind turbines operated by Iberdrola Renovables stand at the Maranchon wind farm in Maranchon, Spain
Qatar is buying 6.16% of Iberdrola for €2.2bn ($3bn), helping the Spanish utility finance its Brazil operations and further diluting unwanted suitor.
Iberdrola, saddled with €24bn of net debt, said yesterday it would issue 338mn new shares and sell them plus treasury stock at 5.63 euros each to Qatar Holding, part of the Gulf state’s sovereign wealth fund.
 “We believe the market will look upon this capital increase as a defensive move of ... Iberdrola against the entrance of ACS in its shareholding structure,” broker Mirabaud said in a note to investors.
Spanish builder ACS holds about 20% of Iberdrola and has said it plans to take its stake up to 30% in its drive to win a seat on the utility’s board, which it is also fighting for in the courts.
Qatar has now become a bugbear for ACS’s expansion plans on two fronts. The Qatar sovereign wealth fund also took a 9.1% stake in ACS’s other buyout target, German builder Hochtief.
The share issue, priced at a 5.5% discount to Friday’s closing price, will dilute Iberdrola shareholders by 5.81%. The remaining 0.35% of Iberdrola promised to the Qataris will come from treasury stock.
Iberdrola shares gained 1.6% by 1302 GMT, outperforming the Spanish stock market and defying analyst expectations that the stock would fall on news of the dilution.
“I think this is a case of sell on the rumour, buy on the news. The market was expecting moves to dilute ACS, but this one also gives Iberdrola a powerful core shareholder who will defend its management’s interests,” a Madrid-based broker said.
Qatar would be a formidable opponent to any possible moves ACS might make to gain influence in Iberdrola which go against minority shareholders’ interests, as it did with the low-ball bid it made to control Hochtief, a Madrid-based analyst said.
Iberdrola also said it had cancelled a 247mn share issue announced last week as part of its all-share bid for outstanding stock in its Iberdrola Renovables unit, and will instead buy back some of its own shares to redistribute to the latter’s investors.
Iberdrola aims to repurchase the 20% of Renovables it listed in 2007, offering shareholders one of its own shares for every two they own in the unit.
Brokers said news that the share issue is being replaced by a buyback was also supporting Iberdrola’s share price.
Iberdrola said in a presentation it had agreed with Qatar Holding to explore investment opportunities in Latin America, where it recently bought Brazilian utility Elektro.
The Spanish utility spent $2.4bn to buy Elektro, which it wants to merge with its 39% owned NeoEnergia affiliate in a society where it has a controlling stake.
Yesterday, Iberdrola said it needs €3bn in additional financing to complete its Brazilian investment goals and complete the Renovables buyback.
The Qatar stake in Iberdrola is the latest in a string of Spanish investments by Gulf states.
Qatar, flush with cash thanks to abundant natural gas resources, recently committed €300mn to buying into Spain’s troubled savings banks sector.
Abu Dhabi also said it will invest in a Spanish savings bank and its IPIC investment corporation bought out Spanish oil company Cepsa in a $5bn deal in February.