E.on Sweetens the Deal
February 3, 2007
E.On head Wulf Bernotat said Endesa would "retain its autonomy and decision making power" and would continue running operations out of Madrid. Endesa would manage E.On's operations in southern Europe and Latin America, Bernotat said at a press conference on Saturday.
If the takeover goes ahead, Bernotat said he expected uniting Endesa's operations with E.On would "deliver returns above its cost of capital" within three years.
Germany's largest power group is offering 38.75 euros per share for Endesa, up from its previous offer of 34.50 euros, Spanish stock market authorities said on Friday.
Biggest ever European utility takeover
The takeover would be the biggest ever in the European utilities sector.
The offer gave no premium on the current share price, however, with Endesa shares closed on Friday before the announcement at 39.04 euros, up 1.64 percent on the day.
Earlier on Friday Endesa chief executive Manuel Pizarro had said that the correct offer price would be that set by the market.
The company's board was due to discuss the approach on Tuesday.
Offer higher than 10-day average share price
E.On said the new price includes a premium of 109 percent on Endesa's closing share price on Sept. 2, 2005, the last trading day prior to the publication of the bid by Gas Natural.
"It is even slightly above Endesa's average last 10-day share price at the Madrid Stock Exchange," the German firm said in a statement.
E.On's bid is conditional on 50.01 percent of Endesa shareholders accepting the offer.
A fly in the ointment could come in the shape of Endesa's largest single shareholder, Acciona, which owns a 21 percent stake in the Spanish firm.
On Friday it reported that it would wait and see the level of acceptance of E.On's offer among other Endesa shareholders before deciding whether to sell.
Directors at Gas Natural had on Thursday agreed unanimously to abandon their 17-month-old campaign to acquire Endesa, leaving E.ON as the only firm in the running to create a new European energy giant.