* China takes aim at a strategic European energy asset
* Bid seen too low, shares soar above bid price
* Bidder China Three Gorges already owns 23 pct stake
* China State Grid owns 25 pct of Portugal gird firm REN (Adds comments on EU regulatory and trade issues)
LISBON/PARIS, May 14 (Reuters) - Shares in Portuguese utility EDP jumped as much as 12 percent on Monday, topping the bid price offered by China Three Gorges (CTG), indicating that the market believes there could be a counter offer or a higher price could be extracted from the Chinese state-owned utility.
The gains show there is little that could stop the bid as the European Union has no power to block it and the Portuguese government appears to be backing it, despite a call from its allies in the Communist party for EDP to be renationalised.
EDP shares rose as high as 3.49 euros, above CTG's 3.26 euros per share bid, which represented a premium of less than 5 percent on the firm's Friday closing price.
The deal proposed late on Friday valued EDP at 9.07 billion euros ($10.8 billion), excluding the 23 percent stake CTG already owns.
Analysts say CTG's bid is relatively low compared to other recent Chinese bids for European energy assets, where Chinese firms have offered top dollar to outbid European utilities and infrastructure investment funds.
"The offer price is too low to be successful," state-owned Portuguese investment bank CaixaBI said in a note.
Portuguese Prime Minister Antonio Costa told reporters on Friday his government had no objections to the bid.
CHINESE EXPANSION
Kristian Ruby, secretary general of European utilities lobby Eurelectric, said he was not surprised by CTG's move and expects to see more bids like this as Chinese firms pursue electricity infrastructure assets in Europe.
Jean-Marc Ollagnier, global head of resources at consulting group Accenture, saw the bid as part of China's One Belt One Road strategy under which it wants to reverse the direction of the investment flows along the old Silk Road.
"China knows that they will face local resistance about strategic assets, but clearly this is a long-term strategy and we will see progress in the coming years," he said.
CTG and another Chinese state company, CNIC, together hold 28.25 percent of EDP shares. With full control of EDP and its renewables unit EDPR, CTG would become one of the top European renewables players, with a large presence in the United States and Brazilian markets.
But other shareholders may balk at being low-balled.
Funds holding major stakes in EDP include Capital Research with 12 percent, Masaveu Herrero with 7.19 percent, BlackRock with 5 percent, Mudabala Investment with 4.06 percent and Capital World with 2.69 percent, ThomsonReuters data showed.
The Qatar Investment Authority and Norges Bank Investment Management, two major sovereign wealth funds, also each hold more than two percent.
JP Morgan said CTG's offer is too low for achieving full control of a vehicle providing a strategic footprint into U.S. renewables. "We expect management/minorities to claim a higher price," it said in a note.
EDP and other minority shareholders so far have not commented.
RIVAL BID?
Paulo Rosa, a trader at Go Bulling brokerage in Porto, said the shares' jump shows the low bid could draw in others.
"We can't rule out a competing bid," he said.
Last year Reuters reported that Spain's Gas Natural had approached EDP about a possible merger, which was subsequently ruled out by the two companies.
French utility Engie has also been reported to have examined a bid, although EDP denied there had been talks.
A bid from a European utility could be more problematic for Portugal's government from an employment point of view, as private firms may want to cut jobs to boost profitability.
While the takeover may need clearance from competition authorities in some of the countries in which EDP and EDPR operate, the EU can do little to stop it.
The European Commission in March drafted rules to block foreign takeovers of strategic firms, but the proposal would need the okay from EU countries and EU lawmakers, and there is no unanimity on that issue.
With another Chinese state-owned firm, State Grid of China, owning 25 percent of Portugal's state power network REN, China is also circumventing EU unbundling legislation, which bans utilities from owning power grids.
"For Brussels to intervene, there would need to be dumping or an abuse of monopoly," said Nicolas Goldberg of Colombus Consulting.
He added that full control of EDP would strengthen China's hand in talks with the EU about renewable energy exports.
Already dominant in solar panels, China is now pushing ahead in wind turbines. Chinese turbine maker Goldwind last year sold more turbines worldwide than Vestas, although the Danish firm still installed more capacity, according to WindPower Monthly.
French power industry consultant Thibault Laconde said CTG's move is bound to sharpen tensions over international trade.
"It raises the question of reciprocity. A move in the opposite direction would not be possible," he said, adding that for EU firms it would be hard even to buy an individual power plant in China, let alone mount a hostile bid for a utility.
(Writing by Geert De Clercq Additional reporting by Sergio Goncalves and Andrei Khalip in Lisbon, Brenda Goh in Shanghai and Foo Yun Chee in Brussels; Editing by Jason Neely/Keith Weir)