GERMANY: Spain soon to rule on E.ON appeal on Endesa bid says Prime Minister Jose Luis Rodriguez Zapatero

Spain's industry ministry will rule in the next few days on E.ON's appeal against conditions imposed on its takeover bid for Endesa, Prime Minister Jose Luis Rodriguez Zapatero said on Tuesday. After a meeting with German Chancellor Angela Merkel, Zapatero said he hoped for a satisfactory solution to the 27 billion euro ($34 billion) bid, which Madrid opposed when the German power giant first launched it. "The Spanish government wants and hopes that the solution will be satisfactory to German interests, for E.ON's interests and above all for Spanish consumers," Zapatero told a news conference. Zapatero's Socialist government had approved an earlier, lower bid for Endesa from national rival Gas Natural which was fiercely opposed by Endesa and has now been frozen by two court cases. When E.ON bid for Spain's largest utility, Madrid gave new powers to the energy commission (CNE) to rule over the takeover because it said the energy sector was strategic, sparking concern of protectionism from the European Union. Spain has until Wednesday to reply to EU concerns about the conditions CNE slapped on E.ON's bid, including the need to sell a nuclear plant and generators fired by Spanish coal, and to lose the business of supplying energy to the nation's islands. E.ON and Endesa both appealed against the conditions. Spanish media have reported that the government will allow E.ON to keep control of nuclear and coal-powered stations as well as assets on the islands. Endesa has long traded above E.ON's 25.41 euros per share bid and on Tuesday rose another 0.6 percent to 28.57 euros. E.ON stock was down 0.3 percent, having earlier shed 1.5 percent on fears it would have to raise its bid for Endesa. Other Spanish energy stocks also rose on expectations that if E.ON wins the battle for Endesa, it will open a new round of consolidation in the sector. ENDS

ITN Source | September 13, 2006

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