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AES plans to
continue hostile
takeover attempt

Bloomberg News

CARACAS, Venezuela -- AES Corp., the largest U.S. power-plant developer, brushed off a shareholder vote aimed at blocking its $1.05 billion hostile takeover offer for Venezuela's largest publicly traded utility, saying it would not be deterred.

Eduardo Dutrey, an AES official, said the Arlington, Va.-based company would pursue its hostile takeover offer of CA Electricidad de Caracas, but declined additional comment.

Oscar Machado, acting president of the Venezuelan company, said 73 percent of EDC shareholders approved a $300 million stock buyback program. Shareholders could buy back up to 14.5 percent of the company's outstanding shares.

"The next step is to see whether EDC will be able to carry out its share buyback program" said Eric Curiel, an analyst with Santander Investment.

Approval of the share repurchase program could hinder AES' hostile takeover bid. EDC said earlier the program would take place regardless of whether AES withdraws its offer.

The Venezuelan company said it has $200 million in cash, and "four ways" to get another $100 million to finance its program. Analysts expect AES to counter.

"I think AES will soon launch a much more aggressive media campaign," said Curiel. "Shareholders really haven't had enough time to understand both offers."

(On Oahu, AES owns a coal-fired power plant at Barbers Point that sells power to Chevron Corp. and Hawaiian Electric Co.)