Translated material
Spanish intrigue
E.ON is ready to uncover the Spanish-Italian conspiracy around Endesa
There is a new twist in the dramatic story of the takeover of the Spanish energy company Endesa by the German concern E.ON. And it seems that E.ON, which unexpectedly had another competitor at the final stage, is ready to take decisive steps.As you know, in the middle of last week, the state-controlled Italian energy concern Enel acquired a 22% stake in Endesa. This seemed to put the impending deal in a stalemate. Yesterday it became known about the Germans' retaliatory move.
The largest international investment bank Goldman Sachs, known for its aggressive market policy and willingness to take risks, proposed that E.ON management buy up Enel shares. The Hamburg weekly Der Spiegel reported this, but the Dusseldorf headquarters of E.ON did not comment on the information. However, as follows from Der Spiegel's report, in the coming days Goldman Sachs, in the interests of the Germans, may buy a blocking stake in Enel on the market. It is believed that this package could be further used to induce Enel to abandon its moves towards Endesa. One of the realistic options is the possibility of exchanging these shares for a 22 percent stake in Endesa, which the Italians acquired last week.
What tactics the E.ON board will choose remains anyone’s guess. However, intervention in the Goldman Sachs case, according to experts, could quite quickly lead the E.ON-Endesa deal to a successful outcome for the Germans. Of course, the possibility of E.ON acquiring a non-controlling stake in the Spanish company cannot be ruled out. But in this case, it is unknown whether the board of the E.ON concern, which is now offering about 41 billion euros for the right to own a controlling stake in Endesa, will be satisfied with such an outcome. Most likely, decisions on this matter will be made this week. Much may become clearer this coming Wednesday at E.ON's annual press conference.
It seems that by this time the management of E.ON intends to take offensive actions. As Spanish El Pais reported on Saturday, E.ON has instructed the relevant services to “investigate” the actions of the Spanish government, the energy competition authority CNE, as well as the stock exchange supervisory authority CNMV. The reason was recent statements by Spanish Industry Minister Juan Clos that the takeover of Endesa would end with a “Spanish decision.” This statement was made on the eve of Enel's announcement of its readiness to acquire the first 9.9% of its shares. It is possible that the deal was concluded according to a preliminary Spanish-Italian agreement.
In a recent interview, Minister Clos also admitted that 11 days before the sensational acquisition of a stake in Endesa by the Italians, he received the head of Enel, Fulvio Conti, in Madrid. However, according to Klos, neither Endesa nor E.ON was discussed at this meeting. Enel does not deny the fact of the conversation between Klos and Conti. Moreover, Conti also had a conversation with David Taguas, the closest economic adviser to Spanish Prime Minister Zapatero. According to the Italians, the discussion was, in particular, about the “positioning” of the Enel concern in Spain. Since 2002, Enel has held only a small stake in Viesgo, the regional energy operator, in the Pyrenees. In addition, as the Italian concern stated, the decision to acquire Endesa shares was made only on February 27 and was implemented over the next hour and a half with the help of UBS Bank.
All these questions and E.ON's claims to Spanish government departments, directly or indirectly trying to torpedo the completion of the merger with Endesa, allows the Germans to take a slightly more advantageous position for maneuvering ahead of the extraordinary meeting of Endesa shareholders, which will take place on March 20. It is expected to introduce changes to the charter of the Spanish company, which should allow E.ON to successfully implement its proposal to purchase its controlling stake.