German energy giant raises offer for Endesa
27 September 2006, FRANKFURT — German energy group E.ON increased its offer for Spain's largest electric utility to EUR 37.1 billion, after a surprise swoop for Endesa by Acciona.
27 September 2006
FRANKFURT — German energy group E.ON increased its offer for Spain's largest electric utility to EUR 37.1 billion, after a surprise swoop for Endesa by Acciona.
Spanish construction firm Acciona SA acquired 10 percent of Endesa at a price of EUR 32 per share, compared with the EUR 25.41 per share offered by E.ON in February.
Acciona left the door open to buying additional shares of Endesa.
The enhanced offer from E.ON late on Tuesday translates into EUR 35 a share, which represents a 38 percent increase over the German company's original bid for Endesa.
"Our improved offer represents an exceptionally attractive opportunity for the shareholders of Endesa and reflects our long-term confidence in Endesa's business model and its prospects for growth," said E.ON chief executive Wulf Bernotat.
The German giant, already Europe's biggest utility, had said earlier that it was "pursuing its offer for Endesa and expects to meet all requirements to proceed shortly".
The company also stressed that completion of the deal is contingent on E.ON's acquisition of at least 50.01 percent of Endesa's shares.
It also depends on the Spanish firm's elimination of a rule restricting investors to 10 percent of voting rights, no matter how big their stake in the enterprise.
E.ON's original offer for the electric utility came after Spain's leading gas group, Gas Natural, launched a takeover bid worth EUR 23 billion bid for Endesa in September 2005.
Endesa management considers the E.ON offer to be better than the one made by Gas Natural because it provides a higher price, payment in cash and would maintain the company's current structure.
If it is successful, the E.ON-Endesa deal would create the biggest electric and gas company in the world, with more than 50 million customers in over 30 countries and 107,000 employees.
Endesa was a state-owned company for decades until it was privatized in 1998.
Spain's National Energy Commission, or CNE, voted unanimously in late July to conditionally approve the bid by E.ON, but both companies - and the European Union - have expressed concern about some of those requirements.
For its part, the Spanish government indicated uneasiness with the acquisition of the utility by a foreign company.
It pushed the CNE to impose 19 conditions on the purchase which were condemned as protectionist by the European Commission on Tuesday.
Under EU pressure, Madrid has pledged to remove many of these.
[Copyright EFE with Expatica]
Subject: Spanish news