E.ON ready for talks with Acciona on Endesa
September 27, 2006
E.ON ready for talks with Acciona on Endesa. Check it out:(EFE Ingles Via Thomson Dialog NewsEdge) By Arantxa Iiguez.
Frankfurt, Germany, Sep 27 (EFE).- The German energy titan trying to acquire Spain's biggest electric utility said Wednesday it is ready to talk to the construction firm that this week acquired 10 percent of Endesa.
In a conference call with investors, the chairman of E.ON said his company is determined to pursue the acquisition and that he had learned through the media that builder Acciona is willing to enter talks with the German concern about its stake in Endesa.
Under the circumstances, it would "probably be a good idea" for E.ON and Acciona to talk, CEO Wulf Bernotat said.
Acciona's surprise purchase Monday of 10 percent of Endesa at a price of 32 euros ($40.55) per share prompted E.ON to sweeten its own bid for the Spanish utility, from the 25.41 euros ($32.19) it offered in February to 35 euros ($44.40) a share.
Amounting to 37.1 billion euros ($47.1 billion) in cash, the enhanced offer from E.ON represents a 38 percent increase over the German company's original bid.
Acciona said its purchase of Endesa shares was not part of "a speculative operation" and that it was prepared to negotiate with E.ON - Europe's largest utility - about control of the Spanish power provider.
The builder also expressed an interest in increasing its holding to 25 percent of Endesa.
Bernotat used Wednesday's conference call to prod Madrid to heed this week's ruling by the European Commission that the conditions imposed by Spain's National Energy Commission on the E.ON-Endesa tie-up are illegal under EU legislation.
Leaders of the 25-member European Union have agreed, at least in principle, on the need to create a genuine single market in the energy sector.
The CEO, who suggested E.ON's acquisition of Endesa could be completed by year's end, said Tuesday's move to increase the offer was intended as a "clear signal" that his company plans to press ahead with the transaction.
The involvement of Acciona has caused Endesa's share price on the Madrid Stock Exchange to soar more than 18 percent, and it stood at 34.75 euros midway through Wednesday's session.
Bernotat said E.ON remains convinced that "the combination of the two enterprises follows a strategic and industrial logic."
He said that E.ON had been prepared from the outset to boost its offer for Endesa if necessary and that "the moment has come to use our flexibility."
E.ON "will use all available financial resources," Bernotat said, mentioning the possibility of issuing new shares or selling assets.
The German company says completion of the deal is contingent on E.ON's acquisition of at least 50.01 percent of Endesa's shares, and 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 February offer for the electric utility came after Spain's leading gas group, Gas Natural, launched a takeover bid worth $27.8 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 gets done, 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.
For its part, the Spanish government opposes E.ON's ambitions to obtain control of Endesa, but has not moved overtly to block the transaction.
While the future of Endesa remains uncertain, another Spanish construction firm, ACS, announced that it bought 6.3 percent of Spain's second-largest utility, Iberdrola.
As ACS already holds 35 percent of No. 3 utility Union Fenosa, its foray into Iberdrola shares sparked speculation about a possible merger between the energy companies. EFE
aia/dr
Copyright 2006 EFE News Services (U.S.) Inc.
Related Tags: percent endesa, Endesa, endesa, percent, acciona, company
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