Many investors have been speculating for weeks that France's major utility, Electricite de France, might bid on Iberdrola, owner of U.K.-based ScottishPower, The Glasgow Herald reported.

Iberdrola's shares gained more than 4.5 percent at one point during the day Wednesday after a French newspaper reported EDF rejected Iberdrola's offer of a 20 percent stake because it wants 100 percent. Iberdrola, however, denied the report of the offer.

Analysts say Spain is an attractive market because its power demand has risen faster than the EU average for the past 10 years and it's expected to continue through 2011.

In the last decade, EDF has acquired Germany's Energie BadenWuerttemberg, Italy's Aem and Edison and London Energy, though they said they would not consider a hostile takeover of Iberdrola.

EDF is also rumored to have its eyes on British Energy and has said it wants to build at least four nuclear plants in the United Kingdom.