AES bid for CANTV lifts markets.(stocks of Venezuelan companies)(Brief Article)

CARACAS -- Venezuelan shares rose sharply on Thursday, extending Wednesday's 1.54% jump, with the IBC stock index rising to as high as 7229.08 points or a 3.55% gain, on the back of AES Corp's $1.4 billion bid for a controlling stake in the domestic telecom company CANTV. Although the company's shares were suspended in Caracas, its New York listed ADR's rose a further 18.3% to trade as high as $26.06, taking its two day rally to over 30%. These developments are, broadly speaking, good news for the country's beleaguered stock market which has fallen heavily over the past three weeks amid fears of an increasingly interventionist stance from the government.

At the moment AES controls 6.9% of CANTV through its majority stake in its subsidiary Corporacion EDC. Given the reaction of the markets, the success of the deal is far from certain. AES is bidding $24 for CANTV's New York listed stocks and $3.43 for its Venezuelan listed class D shares. Given that ADRs jumped to $26 in early trade, this could suggest that the market valuation of the company is higher than AES have offered, and opens up the prospect of alternate bidders entering the market.

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