Endesa SA's top two shareholders trumped a €42.3 billion ($56.4 billion) bid by E.ON AG for Spain's biggest utility on Monday, saying they would offer one euro per share more than the German group.
Enel Spa and Acciona SA, which together own 46% of Endesa, said they would offer at least €41 a share to buy out the power group if E.ON AG fails to win more than 50% of Endesa's shares in its €40 bid. E.ON, which raised its offer for a third time on Monday, said it would take legal action against Enel and Acciona and asked Spanish market regulator CNMV to block the bid and force its rivals to sell some of their Endesa stock. Last week, CNMV said Enel and Acciona's proposed offer was illegal and that they would not be allowed to bid for six months. On Monday, CNMV said it would rule on the situation before the market opened on Tuesday. Endesa declined to comment. Analysts said the new bidding round had pushed Endesa's stock price above its real value and some recommended investors sell their shares rather than wait months for another offer.
Endesa SA shares, which had been suspended since Thursday evening, jumped 6.1% to €41 when they opened on Monday. By 11:53 a.m., they were up 4€ at €40.18. At €41, Endesa is valued at 15.5 times forecast 2008 earnings against an average of 14.6 times for the DJ Stoxx index of European utility stocks, according to Reuters data. On Friday, CNMV said the fact Enel and Acciona had declared their plan to make a bid for Endesa was illegal and gave E.ON one last chance to raise its bid from €38.75 a share. Endesa shares, which have been suspended since Thursday evening, reopened up 6.1% at €41.0. It then eased to €40.80. E.ON was down 1% at €99.65, Acciona was up 0.6% and Enel was flat.
E.ON jumped into the battle for Endesa last February, when it trumped a hostile bid from Gas Natural by offering €29 billion to get into the fast-growing Spanish market and win Endesa's Latin American assets. E.ON, the world's biggest utility, then had to fend off hostility from the Madrid government, which made no secret of wanting to keep Endesa in Spanish hands, incurring the wrath of the European Commission. It then had to contend with Acciona suddenly snapping up a major stake in Endesa in September and criticising E.ON's bid and then Enel charging onto the scene buying stock and options worth 24.9% in February. The fact that Enel bought its stake days after a meeting between the Italian and Spanish prime ministers has raised calls of political interference, which both countries have denied. Caja Madrid, which owns about 10% of Endesa, was due to hold a board meeting on Monday to decide whether to sell its stake to E.ON. (reuters.com)