What regulatory hurdle prevented the CTG takeover of EDP?

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Regulatory Hurdle Prevented CTG Takeover of EDP

Shareholders in Energias de Portugal (EDP) rejected a €9 billion takeover bid from China Three Gorges (CTG) Corporation primarily because of a regulatory demand to modify the company's voting rights structure. This requirement, stipulated by the Portuguese stock exchange, was a condition for approving the Chinese offer and directly conflicted with EDP's existing bylaws.
Voting Rights Cap Requirement

The Portuguese stock exchange mandated a reform of EDP's voting rights as a prerequisite for granting its approval to CTG's takeover bid. Under EDP's current regulations, no single shareholder is permitted to hold more than 25 per cent of the company's voting rights, irrespective of the actual size of their shareholding.
CTG's Shareholding Status

China Three Gorges Corporation already held the position of EDP's largest shareholder, possessing 23.27 per cent of its capital. This significant stake, coupled with the existing 25 per cent voting rights cap, presented a structural impediment to the proposed full takeover.
Shareholder Rejection of Bylaw Changes

The decision by EDP shareholders to block the takeover was a direct consequence of their refusal to approve the necessary changes to the company's articles of association. While CTG expressed its commitment to remaining a long-term strategic investor, the shareholders ultimately voted against altering the company's status as required by the exchange.

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What regulatory hurdle prevented the CTG takeover of EDP?

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