Endesa Says Gas Natural Must Hike Bid

MADRID, Spain – Gas Natural must raise its $26.5 billion bid if it hopes to succeed in a hostile takeover of Spain’s biggest electricity utility, Endesa, the utility’s chairman said Tuesday.

Speaking at a Senate hearing, Manuel Pizarro said Gas Natural should increase its offer by at least 25 percent if Endesa shareholders are to consider acceptance.

Gas Natural, Spain’s biggest gas distributor, launched its bid last September, offering 7.34 euros in cash and 0.569 Gas Natural shares for each Endesa share. That made the bid worth 22 billion euros ($26.5 billion).

The Spanish government cleared the bid in early February with several conditions attached for the divestment of assets and clients.

Pizarro said Endesa must increase the cash portion of the bid.

“Normally, (tenders) should be in cash,” Pizarro said, adding that the final price should be between 25 and 40 percent higher than the company’s market value.

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On the Net: http://www.endesa.com