Spanish
caught off guard as E.ON targets Endesa
By
Dominique Orin
AFP
MADRID
Petroleumworld.com
02 22 06
The
Spanish government's backing for a national champion in the energy
sector received a setback Tuesday following a surprise 29.1-billion-euro
(34.6-billion-dollar) takeover bid from German giant E.ON for
leading Spanish electricity group Endesa.
Analysts were quick to see the cash bid as a blow to the Socialist
government's support for "strong energy entreprises"
that can compete in the global market.
Madrid on February 3 gave its blessing to a rival bid from Spanish
utility Gas Natural before E.ON muscled in top Gas Natural's 22.5-billion-euro
offer by 29 percent.
A finance ministry spokesman told AFP it was "not very likely"
the government would intervene, wielding the "golden share"
it holds in Endesa through June 2007 that would enable it to block
E.ON, and said authorities were "totally neutral" on
the German offer.
However, a ministry spokesman earlier mulled the possibility of
using the government holding as a blocking device, alluding to
the technical possibility of a veto.
E.ON chairman Wulf Bernotat said earlier: "We know there
is a golden share."
The European Union has ruled such state holdings illegal, and
the ministry spokesman pointed out that Madrid was in the throes
of debating the passage of legislation to bring Spanish law in
line with the EU stricture.
Spanish Secretary of State for Communication Fernando Moraleda
said Madrid wanted to see the creation of "strong entreprises
with Spanish capital on board and with a capacity to compete on
international markets."
Asked about future government policy regarding Endesa, Moraleda
added that Madrid respected the rules of the market and would
act "with prudence" and in accordance with its "convictions".
Senior ruling Socialist Party official Alfredo Perez Rubalcaba
said Madrid would apply "the same criteria" to the case
as it had earlier with Gas Natural, saying that what counted was
"the general interest, the interests of consumers and the
strategic character of the sector."
If the deal goes through it would see the creation of the world's
leading power and gas supplier.
An analyst with a leading European bank said the German firm's
economic clout would likely see off Gas Natural's hopes.
According to the website of newspaper El Mundo, German Chancellor
Angela Merkel on Monday personally tipped off Spanish Prime Minister
Jose Luis Rodriguez Zapatero regarding the counter offer.
The main conservative opposition Popular Party (PP), which said
it had detected regional politicking in the original deal since
the government has allies in the Catalan region that is home to
Gas Natural, accused the government of being "the only ones
responsible" for the German counter-bid.
Industry Minister Jose Montilla is himself a Catalan.
"With its poor meddling it has opened Pandora's box"
in the energy sector, said PP economy spokesman Miguel Arias Canete.
Canete accused the government of "having destroyed the prestige
of regulatory organs" in Spain over its "open support"
for the hostile bid for Gas Natural.
There had been contradictory signs in Spain concerning the Gas
Natural bid.
The market regulator approved the deal but with conditions while
the competition regulator was opposed.
Whereas the Gas Natural bid was hostile, E.ON said it expected
Endesa's management to approve its offer.
E.ON stressed it believed a deal would have "strategic and
market logic." But E.ON chairman Bernotat added that "Endesa
would remain a Spanish company serving the Spanish market ...
there are no disposal plans."
The E.ON announcement gave a boost to shares meanwhile in Spanish
number two electricity firm Iberdrola, amid rumours Gas Natural
may turn to it as an alternative suitor.
AFP
02 21 06
Copyright
© 2006 AFP. All rights reserved
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