Brazil's Eletropaulo shares soar after takeover bids

Brazilian power distribution company Eletropaulo Metropolitana SA's shares soared after the company disclosed two rival takeover bids from European energy firms.

Italy's Enel SpA has offered to pay 28 reais per Eletropaulo share. Enel, an Italian utility that has invested in fast-growing Latin America to offset sluggish European markets, said in a statement that its investment would total up to around 1.1 billion euros ($1.4 billion).

Enel's offer came hours after Neoenergia SA, controlled by Spain's Iberdrola SA and Brazilian pension funds, said it would pay 25.51 reais per share. If it succeeds in acquiring the minority stake, Neoenergia said it would acquire the rest of Eletropaulo's shares, at a total cost of 5.7 billion reais ($1.7 billion). Shares in Eletropaulo jumped 24 percent to 27.30 reais on Tuesday afternoon trading in Sao Paulo.

Earlier on Tuesday, Eletropaulo announced its board had approved the issue of 58.9 million new shares, equivalent to a 26 percent stake.