E.On Improves Bid for Endesa by 38%

Elena
27 Sep, 2006
New York City

E.On upped its all-cash offer for Endesa to 35 euros a share vs. a previous bid of 25.40 euros a share. The company''s move comes after Acciona disclosed Monday that it bought a 10% stake for 32 euros a share, suggesting that the Spanish government was urging the conglomerate to buy a stake in order to keep Endesa out of German reach.

[R]8:00AM Germany’s E.On raised its bid for Endesa to $47 billion.[/R]
Endesa ((ELE)) received an improved bid offer from Germany''s E.On ((EON)) which raised its initial offer for the Spanish utility by 38% to $47 billion (37 billion euros). E.On upped its all-cash offer for Endesa to 35 euros a share vs. a previous bid of 25.40 euros a share.

The company’s move aims at reducing the attractiveness of rivals’ proposals and ensuring that they don't end up owning the company. It comes after Acciona disclosed Monday that it bought a 10% stake for 32 euros a share, or 3.39 billion euros, suggesting that the Spanish government was urging the conglomerate to buy a stake in order to keep Endesa out of German reach. The Spanish government has been against an E.On acquisition of Endesa for a long time, first trying to block it and then imposing several conditions on a deal. Another Spanish company, Gas Natural, has a hostile cash-and-shares offer that at Monday's close was worth 21.42 euros a share.

E.On said that to be successful, its offer needs the approval of investors holding more than 50% of Endesa''s shares. Endesa's Madrid-listed shares jumped 6.5% to 34.61 euros. E.On shares slipped 1.4% in Frankfurt.


[R]7:30AM Asian stocks advanced sharply Wednesday tracking U.S. market gains[/R]
Asian markets closed higher on Wednesday. The Nikkei 225 index advanced 390.42 points, or 2.51%, to 15947.87. Canon Inc and Nikon Corp were leading advancers, rising respectively 3.2% and 2.4%. Sony Corp spurted, advancing 3%.

Shares of Softbank Corp rose 0.9%, adding to sharp gains that the Internet conglomerate registered Tuesday after announcing a refinancing plan. Sumitomo Mitsui Financial Group Inc gained 4.4% following reports that the banking group will repay 695 billion yen ($5.9 billion) in bailout aid it owes to the government earlier than expected.

Hang Seng Index in Hong Kong rose 213.43 points, or 1.2%, to 17521.51. Among the banks, BOC Hong Kong rose 5.3%, becoming the biggest blue-chip advancer on the day, and banking company HSBC Holdings rose 0.9%. Shares in Taiwan finished higher, led by construction and property firms after the Taipei City government began allowing certain unused land-development rights to be sold. The Weighted Price Index of the Taiwan Stock Exchange rose 44.52 points, or 0.7%, to 6946.27.

S&P/ASX 200 index in Australia ended up 103.6 points, or 2.1%, at 5093.2. Australian Pharmaceutical Industries soared 19% after confirming it had received takeover approaches and Vision Systems rose 10%. Resource large-caps BHP Billiton and Rio Tinto both gained 3.7%, respectively.

Shares in South Korea also rallied, lifted by banks. The main Korea Composite Stock Price Index, or Kospi, gained 1.2%, or 16.06 points, to 1360.03.


[R]6:30AM European stocks rise on Wednesday helped by M&A and mining shares.[/R]
Europe was higher by mid morning on Wednesday. The U.K. FTSE 100 index rose 0.6% at 5,907, the German DAX Xetra 30 index rose 0.5% at 5,991 and the French CAC-40 index climbed 0.5% at 5,242.

M&A

Eon, the German utility at the centre of the battle for Spanish company Endesa, raised its offer for the Spanish company by 38%. This would make it the largest ever utilities takeover should the deal go through.

Advancers

Gas Natural, which still showed an interest in acquiring Endesa and failed in a hostile bid earlier this year, gained 5.5%. Also receiving a boost from the moves in Spain was EDP, power generator in Portugal. Its shares gained 4.4%.

Hennes & Mauritz, the Swedish fashion retailer, gained 4.5% after it reported a forecast-beating rise in third-quarter pre-tax profit, boosted by a 5% rise in like-for-like sales.

Decliners

E.On wasn''t performing so well, down 1.7% after raising its offer for Endesa. French insurer CNP Assurances fell 5.6% after its 16.6% rise in first-half net profit failed to impress.

Corporate news

Aer Lingus, the Irish airline, debuted on the Dublin bourse on Wednesday after its initial public offering was nearly four times oversubscribed. The stock was priced at 2.20 euros, the lower end of the pricing range, but in early trade it stood at 2.39 euros.

Oil and gold

Oil prices rose Wednesday amid lingering uncertainty about OPEC production plans. By mid-afternoon Wednesday, light, sweet crude for November delivery had rebounded 35 cents to $61.36 in on the NYME. November Brent crude on London ICE futures exchange rose 14 cents Wednesday to $60.26 a barrel. Gold traded in London at $595.10, up from $591.10 late Tuesday.

Currencies

The U.S. dollar was mostly higher against other major currencies in European trading Wednesday morning. The euro bought $1.2692, up from $1.2691 late Tuesday in New York. The British pound traded at $1.8889, down from $1.8949. The dollar bought 117.29 Japanese yen, up from 117.10.