German power company E.ON could settle for a minority stake in Spain’s largest utility Endesa or even drop its bid according to Chief Executive Wulf Bernotat. He spoke as the European Commission pushed ahead with legal action against the Spanish Government over the conditions it imposed on E.ON’s bid.
Referring to the opening up of the European energy market, Bernotat said: “We are in talks with the European Commission on how transnational cooperation between the utility providers and their transmissions systems can be regulated.”
E.ON also announced that it has dropped a demand that Endesa’s shareholders scrap a rule limiting any one investor’s vote to 10%. That may mean that Italy’s Enel and other large Endesa investors would not be able to assemble a voting majority.
Bernotat also said that his company wants to hold talks with Enel over Endesa.
E.ON’s change of heart over the ten per cent voting rights rule make things more difficult for Enel which is moved to buy 22% of Endesa’s stock and Spanish builder Acciona, which holds 21% and is opposed to the E.ON bid.
The European Commission meanwhile wants answers from Madrid over its actions. Commission spokemans Jonathan Todd said: “The European Commission has decided this morning to send Spain a reasoned opinion, under EC Treaty infringement procedures, because of Spain’s failure to comply with two commission decisions requiring Spain to lift illegal restrictions on the proposed E.ON takeover bid for Endesa.”
The Commission believes that Spain broke rules on free movement of capital and the freedom to set up business anywhere in the EU. Madrid could be taken to the European Court of Justice if it does not give a satisfactory reply within one week.