Last Stand

In a few days it will become clear who got Endesa

The struggle of the German concern E.ON for the ownership of the largest Spanish electricity company Endesa, which has been going on for more than a year, is becoming increasingly fierce. E.ON and other contenders began a price race, and the German concern was forced to go to court.

At the end of last week, E.ON raised its offer to Endesa shareholders to 40 euros per share. In response, both of its competitors - Italian Enel and Spanish Acciona - notified of their intention to pay at least 41 euros. This offer is valid if E.ON is unable to consolidate 50.01% of Endesa shares as part of the offer.

As a result of E.ON's new move, the price for Endesa increased to 42.3 billion euros. The last time, in February, the Germans raised the transaction amount to 38.75 euros per share from 34.5 euros, or up to 41 billion euros for the entire company. Formally, now E.ON could not increase the size of its offer, but unexpectedly for many on Friday, the Spanish stock exchange supervisory authority granted this right to the Germans. Probably, in this way it reacted to the intention of Enel and Acciona to come out against E.ON with a joint proposal - such a “cartel” was considered unauthorized by the Spanish government agencies, which had so far created the biggest obstacles to E.ON.

E.ON filed lawsuits against both competing companies, which are major shareholders of Endesa, in the courts of Madrid and New York. As follows from yesterday's message from the German concern, E.ON will do everything possible under the law to disrupt the plans of Enel and Acciona. E.ON management demanded that the Spanish authorities prohibit Enel and Acciona from announcing a joint offer. The “illegal steps” of both companies are nothing more than “an attempt to mislead Endesa shareholders and manipulate shares,” E.ON explained the reason for the legal demarche against the brewing Spanish-Italian conspiracy.

In addition, E.ON spoke to the Spanish stock exchange supervisory authority with a demand to open an investigation against Enel and Acciona due to the fact that they misled the market, violated the rights to acquire companies and traded insider information. The Germans also demanded that both companies be obliged to sell the shares they had acquired in Endesa and that such transactions be prohibited in the future.

If, contrary to the plans of the German concern Enel and Acciona, success is achieved, then Viesgo, the Spanish “daughter” of Enel, will be merged with Endesa - as a result, Endesa itself will retain Spanish “citizenship”, being under the control of a joint holding company. With this model, the controlling stake - 50.01% of the shares - may end up with Acciona.

With the increase in the size of E.ON's offer, the deadline for a final shareholder decision, which would normally have expired last Thursday, has been extended to April 3 in Spain and even to April 6 in the United States.

Yuri Shpakov