[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Tuesday, 21 February 2006, 17:38 GMT
E.ON in $35bn Endesa takeover bid
Gas ring
Competition for Endesa is hotting up
German power firm E.ON is to launch a 29.1bn euro ($35bn; 19.9bn) bid for Spanish utility Endesa.

The offer will seek to trump an existing 22.4bn euro hostile approach for Endesa from fellow Spanish energy group Gas Natural.

Gas Natural's bid has already been approved by the Spanish government, but Endesa has voiced its strong objection.

E.ON said it expected Endesa to back its approach. The Spanish government said it was "totally neutral".

Madrid could block E.ON's bid through its "golden share" in Endesa, but a spokesman for the finance ministry said such a move was "not very likely".

'Friendly atmosphere'

E.ON chief executive Wulf Bernotat said he and his board had held a number of positive meetings with Endesa's senior managers ahead of the takeover bid announcement.

"The atmosphere was friendly, therefore we expect that the reaction from Endesa management also will be a friendly one," he said.

Shares in Endesa were up more than 9% following E.ON's announcement, while the German firm itself was the biggest rise on German's main Dax index, gaining 4% by late morning.

High price?

Yet some analysts still questioned the wisdom of the deal and the price E.ON is prepared to pay.

Karin Brinkmann of Germany's HVB Bank said the offer was "relatively high", adding that E.ON was taking a risk in wishing to take over Endesa's significant operations in South America.

"E.ON is moving into Latin America for the first time. That is extremely brave," she said.

E.ON said its bid, which equates to 27.50 euros per share, could eventually rise to 55.2bn euros when net financial liabilities, provisions and minority interests are taken into account.

Gas Natural first unveiled its hostile approach back in September.

Endesa shareholders are due to discuss its offer at their annual general meeting on Friday.

Madrid backs Gas Natural takeover
03 Feb 06 |  Business
Gas deal lifts E.ON's UK presence
26 Sep 05 |  Business
Germany clears 10bn euro gas deal
31 Jan 03 |  Business

The BBC is not responsible for the content of external internet sites


Americas Africa Europe Middle East South Asia Asia Pacific