E.ON has no clear signal from two top Endesa shareholders over its final $53 billion bid for the company that is expected to boost the German utility earnings immediately in a successful deal. Spain's construction group Acciona and Caja Madrid together control over 30 percent of Endesa shares.
"We had in the past contacted both Acciona and Caja Madrid. But I must tell you that we have no clear confirmation what they are going to do," E.ON Chief Executive Wulf Bernotat said.
As a condition of its bid, Endesa shareholders must vote to change the company's statutes, removing a 10 percent cap on the voting rights of any one shareholder. A shareholder meeting is expected in March to vote on the issue.
Acciona has said it wants to raise its Endesa stake further and have a major influence on the way the company is run, while keeping Endesa independent. It says it will sell its stake if E.ON gets more than 50 percent with its offer.
Acciona, which has paid an average of about 33-34 euros a share for its 21 percent stake, had said Endesa was worth 53.9 euros including a control premium. In contrast, Endesa's second biggest shareholder Caja Madrid had favoured a lifting of the block.
Bernotat, speaking to analysts and investors from Madrid, was pitching his hope on Caja Madrid to support E.ON's offer. "If we have a clear majority in this score, we can assume that the shareholders will also tender their shares later on. Therefore this decision by Caja Madrid, I think, is an important one," he said.
Bernotat also said the acquisition, if successful, would immediately enhance earnings, but declined to be specific. "Our group earnings will go up in the first year and ... the transaction will meet our cost of capital within three years," he told reporters in Madrid before the conference call.
It would also bring 600 million euros in synergies annually thanks to better operating efficiency from 2010, he added. On Tuesday, Endesa's board will meet to discuss the new price and call a shareholder meeting.
E.ON on Friday raised its offer for Endesa to 38.75 euros per share from a previous bid of 34.5 euros per share, valuing Spain's biggest power utility at 41 billion euros in what would be the world's biggest utility acquisition.
"The (stock market regulator) decision to make us put in a final bid provides clarity for shareholders. It's the final price, so there is no more speculation," Bernotat said.
The offer fell right in the middle of what market analysts expect will bring E.ON success. E.ON's bid, if successful, would create Europe's largest power group, expand E.ON's presence in Italy, France and Latin America and sharply boost E.ON's profit growth. The German utility also aims to build a strong position in the Spanish power market, which has grown seven times faster than Germany's since 1990. The last day for Endesa shareholders to tender their shares will likely to be late in March, with settlement in the first-half of April.
E.ON, formed in 2000 by the merger of two of Germany's biggest industrial groups Veba and Viag, sold more than 50 billion euros non-core assets and bought over 40 billion euros new assets to become a pure electricity and gas play.
Comments
Comments are closed.