Enel SpA, Italy's biggest power company, may increase its stake in Endesa SA to almost 25%, threatening to thwart E.ON AG's yearlong takeover bid for the Spanish power company.
The Italian utility yesterday bought 9.99% of Endesa for about €4.13 billion ($5.47 billion). Today it said it's considering raising the stake to as much as 24.99%, in a statement distributed by the Italian stock exchange. Enel's purchases may hamper E.ON's attempt to take over Endesa, Spain's largest utility. The €41 billion bid by the Dusseldorf, Germany-based company may fail because it probably lacks support from a majority of Endesa's shareholders, Spanish Industry Minister Joan Clos said yesterday. „It looks like E.ON will probably have to pull out now,” said Herbert Wertz, who helps manage the equivalent of about $85 billion at AMB Generali Asset Management in Cologne, including E.ON shares. „It's just gotten very tight.” E.ON will maintain its offer in the current form, it said today in a statement. Shares in E.ON fell €4.33, or 4.2%, to €98.92 in Frankfurt as of 11:14 a.m. Enel said it acted without consulting other Endesa shareholders when it bought the stock in out-of-market transactions from institutional investors. Approval is needed from Spain's energy regulator to own 10% or more of Endesa. Acciona SA owns about 21% of Endesa and opposes E.ON's bid. An Acciona spokesman couldn't be reached for comment today.
„The chances that E.ON fails and pulls out are increasing,” said Alberto Espelosin, a strategist at Zaragoza, Spain-based Ibercaja Gestion, which manages the equivalent of $9.4 billion. Spain's stock market regulator demanded Enel disclose its intentions regarding Endesa before the end of the day, the regulator said in a statement. Enel must say whether it aims to buy up to 24.99% of Endesa, what its intentions are regarding participating in management, and whether it will vote for or against lifting Endesa's voting-right limits. Endesa's board asked shareholders to vote in favor of lifting the anti-takeover measures in a March 20 meeting. The Enel transaction was financed out of cash flow and credit lines and is part of its European expansion strategy, the Italian company said. European utilities have bought rivals to gain access to customers and generation assets as Europe prepares to open to more competition in July. Enel, which owns Spanish generator Electra de Viesgo SA, is seeking to boost sales outside Italy, where competition rules limit its growth. Enel yesterday bought the 105.8 million shares in Endesa for €39 apiece. That is higher than the €38.75 a share E.ON is offering for Endesa. Shares in Endesa are suspended from trading. „A possible E.ON pullout, or that we end up with a shareholder block, are bad news for Endesa shares,” Espelosin said. (Bloomberg)