Italians wade in to spoil E.ON's Spanish dream

E.ON, the German energy group, today said it remained committed to buying Endesa, inspite of an apparent challenge to its planned €41 billion purchase of the Spanish energy group.
The German group, which owns Powergen in the UK, sought to reassure investors after Enel, the Italian electricity group, revealed that it had built up a 10 per cent stake in Endesa, worth about €4 billion.
Enel said it had paid €39 a share for its Endesa stake, in a strategic move to strengthen its position in the European electricity market. E.ON plans to offer Endesa shareholders €38.75 a share for their holdings.
The Italian group also said it would consider raising its stake if regulators allowed it to do so.
E.ON's offer will succeed only if Endesa shareholders agree at an EGM next month to change company rules that prevent any one party owning more than 10 per cent of the group.
Endesa's board has indicated that it is now in support of E.ON's approach and said it would recommend that shareholders vote in favour of the changes to the company rules.
The recent show of support from Endesa's board effectively cleared the way for E.ON to conclude its protracted battle to buy the group.
The German group's offer had to overcome several hurdles, including concerted opposition from the Spanish government, which preferred a rival deal with Gas Natural, another Spanish group. Endesa's agreement to call an EGM followed 16 months of wrangling between the three utilities groups and a string of lawsuits.
E.ON said this morning it would continue with its offer in its current form, stressing that it was the only offer open to all Endesa shareholders. Its shares were down 5 per cent in early trading in Frankfurt.
Source: The Times

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