E.ON bid gets backing from Endesa board

German utility E.ON has received a boost in its effort to take over Spanish power company Endesa. Endesa’s board has recommended shareholders accept E.ON’s latest improved offer.

That came just after Italy’s Enel and Spanish building firm Acciona said they would better E.ON’s bid by one euro per share in six months time which is the earliest they’re allowed to bid.

Miguel Artola, head of investment at Bankinter, is dubious about Enel and Acciona’s chances. He said: “It’s a two and a half per cent better offer, but it’s not certain it will ever be launched, and the time scale is problematic and so I don’t think it’s a better offer.”

E.ON’s problem remains that Enel and Acciona control 46% of Endesa’s shares. Caja Madrid, the bank that owns 9.9% of the shares, has not decided whether to sell its stake, but may make a decision soon.

E.ON’s response to the Enel and Acciona’s promise was to say it was an “unlawful attempt to deceive Endesa’s shareholders and to manipulate the price of Endesa stock.” It has filed a complaint with the Spanish stock market authority.

The latest offer as the German attempts to see off its two competitors is 42.4 billion euros.

It is the third time it has raised its bid which now runs until the third of April.

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