Enel buys further 2.98 per cent of Endesa, lifts stake to 24.99 per cent

13 March 2007 – Italian power supplier Enel has announced a share swap deal with merchant bank Mediobanca to buy a further 2.98 per cent of sought-after Spanish electricity company Endesa SA.

The transaction, announced in an Enel statement, would lift the Italian company’s stake to 24.99 per cent, the maximum level permitted without triggering a mandatory bid for the whole of Endesa under Spanish law. Enel’s moves to raise its stake in Endesa has endangered German utility E.ON’s €41bn ($54.24bn) takeover bid for the Spanish power company.

Enel’s chief executive Fulvio Conti has described the move as “friendly,” but analysts suggested it was a political move aimed at blocking E.ON’s bid without any industrial benefit. The Italian and Spanish Governments have strongly denied they encouraged Enel to buy a stake in Endesa.