Companies
E.ON drops out of Endesa battle
German energy group E.ON
has abandoned its takeover bid for Spanish rival
Endesa, instead cutting a deal with
shareholders it had previously been pursuing legal action against.
E.ON has agreed not to continue its bid and not to make a new
offer for Endesa within the next four years. In return, should a joint bid by
Enel and
Acciona – two major shareholders in Endesa – succeed, E.ON will be able to
acquire a significant portfolio of their assets in Spain, Italy and France.
Prior to this, E.ON had accused Enel and Acciona of
attempting to deceive Endesa shareholders, and had asked Spanish authorities to
open infringement proceedings against them.
Wulf Bernotat, E.ON chief executive, said the involvement
of Enel and Acciona made an acquisition of Endesa impossible. Winning a minority
interest, he said, would have led to a stalemate between shareholders and
prompted unpredictable lawsuits. This current agreement, he suggested, will
provide clarity for everyone involved.
The editorial in the Financial Times (4 April) suggested that a behind-the-scenes deal is always less
satisfactory for investors than a choice between competing bids. Beyond this,
said the FT, a clear loser has been the Spanish government’s interventionist
approach and desire for a national champion.
The national champion the country
really needs, argued the FT, is a strong financial regulator able to enhance and
protect the rights of minority shareholders so that Spanish companies are better
able to benefit from foreign investment.
Links
E.ON
Endesa
Enel
Acciona
Financial Times
May 2007
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