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Pampa Energía said to be mulling sale of stake in Edenor

Energy firm hires JPMorgan as it considers selling its majority stake in Argentina’s largest electricity distributor, according to people with knowledge of the matter.

Thursday 25 April, 2019
Powerlines in Argentina.
Powerlines in Argentina. Foto:Bloomberg

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Pampa Energía SA has hired JPMorgan Chase & Co. as it considers selling its majority stake in Argentina’s largest electricity distributor, according to people with knowledge of the matter.

Pampa may consider selling the 51.4 percent it holds in Empresa Distribuidora y Comercializadora Norte SA, which is known more commonly as Edenor, according to the people. JPMorgan was selected by Pampa from more than five banks to advise on the possible sale, which is still in the early exploratory stage, according to a separate person.

Pampa, Argentina’s most diversified independent energy company, is seeking to divest one of its most regulated units as the country heads into a presidential election in October where President Mauricio Macri’s re-election is in doubt. Edenor had thrived under Macri’s initiative to liberalise energy prices and abolish previous leader Cristina Fernández de Kirchner’s policy of freezing electricity tariffs.

Representatives from Buenos Aires-based Pampa Energía and New York-based JPMorgan declined to comment.

Edenor officials didn’t immediately respond to an emailed request for comment.

The people familiar with Pampa’s considerations asked not to be named as the plans are private.

Edenor’s market capitalisation was about US$825 million on Tuesday and a sale could be one of the biggest M&A deals so this year in Argentina. Under local law, a buyer of a majority stake must offer to buy the shares for at least the average price in the six months immediately before the announcement of a change of control.

Edenor’s business includes access to some of the most affluent markets in Argentina such as the northwestern zone of the greater Buenos Aires metropolitan area and the northern part of the city. The local state-controlled pension system owns 27 percent of the shares and the remainder are publicly traded on exchanges in Buenos Aires and New York.

- BLOOMBERG

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