• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Reports: Gas Natural to Up Bid for Endesa

Posted on: Monday, 27 February 2006, 12:01 CST

MADRID, Spain - Gas Natural, Spain's largest natural-gas company, is preparing a new bid for Spanish power company Endesa to thwart one launched last week by German electricity company E.On AG, news reports said Monday.

Gas Natural may offer up to 30 euros ($35.69) a share, more than the surprise all-cash bid of 27.50 euros ($32.71) per Endesa share launched last week by E.On, the daily El Mundo reported, citing sources close to Gas Natural.

Leading daily El Pais said Gas Natural would sweeten its bid to about 28 euros ($33.31) per share. Gas Natural's original offer was a cash-and-stock bid worth about 21.30 euros ($25.34) per share.

El Pais said the board of Gas Natural will analyze proposals from management at a meeting Tuesday. The improved bid would continue to have a stock component, representing about 65 percent of the total offer, the paper said.

The Spanish government has said it favors the Gas Natural takeover bid.

The EU has warned Spain not to try to block the E.On bid for Endesa because it had a cross-border European dimension.

On Friday, it passed a decree to expand the scope of its energy regulator's veto power to include deals in which a foreign buyer targets a Spanish energy company.

Spain said it also intends to phase out a costly arrangement whereby the government pays billions of euros to electric companies each year to offset what they say is the difference between their generating cost and the prices set by the government at the consumer level.

Endesa - Spain's largest electrical utility - reportedly sought 1.5 billion euros in payments for last year. Eliminating this so-called tariff deficit is widely seen here as a way to make Endesa less appealing for E.On.

Gas Natural was scheduled to formally present its original bid on Monday, after which it can present a new offer. The company is due to announce its earnings Tuesday.

E.On said its purchase of Endesa would create the world's leading power and gas company with more than 50 million customers in some 30 countries. An Endesa-Gas Natural combination would form one of the biggest companies in Europe.

Source: Associated Press/AP Online

More News in this Category