MADRID — Spain’s biggest bank Santander has been drawn into the bitter battle for control of Spain’s biggest electricity utility Endesa.

In the latest twist in the year-long takeover fight,  Spanish construction group Acciona have asked Santander to buy stock in Endesa to fight off a rival bid by German energy giant E.ON.

The move is intended to stop E.ON from controlling 51 per cent of Endesa, according to a report in the Spanish daily El Mundo on Friday.

In a series of telephone conversations, the chairman of Acciona, José Manuel Entrecanales, reportedly tried to persuade Santander boss Emilio Botín from buying capital in Endesa.

Santander refused to comment on the report, but did not deny there had been talks between Señor Botín and Señor Entrecanales.

It follows a surprise move earlier this week by  Acciona which bought a ten per cent stake in Endesa and said it intended to up this to at least 24.9.

If it buys any more than 25 per cent of the company, under Spanish takeover law it will have to mount a takeover.

Hours later, in a tit-for-tat move, E.ON increased its bid for Endesa from EUR 24.4 to EUR 35 a share, valuing Spain’s largest utility at EUR 37 billion.

The German bid has met with a hostile reception in Spain.

In February, Spain’s Socialist Government urged the country’s energy sector regulator to bring in 19 different clauses to block a foreign offer.

Prime Minister José Luis Rodriguez Zapatero favoured a lower bid for Endesa from the Spanish energy company Gas Natural.

Acciona’s efforts to make a Spanish block to oppose a foreign takeover could be seen as supporting the Señor Zapatero.

The European Commission ruled this week the barriers brought in by Madrid to prevent foreign takeovers of Spanish companies were illegal.

The Spanish Government has agreed to drop many of the conditions.

[Copyright EFE with Expatica]

Subject: Spanish news