Following is a letter sent to the Editor of the Financial Times:
Sir,
Apart from the clear political interference in the Endesa takeover saga, from various countries, there appears to be an urgent need for a wholesale review of Spanish takeover rules ("Regulator blocks Enel move for Endesa" Financial Times March 23, 2007).
There has been some sort of intervention every step of the way and the takeover authorities, the CNMV, have issued a constant stream of decisions which I assume have some relationship to the takeover rules, although they have been rather difficult to follow.
Now we find ourselves with various decisions that do not seem to have shareholder interests in mind.
Earlier when the Spanish company, Acciona, and the Italian company, Enel, were in the market buying up shares without launching a bid and with the aim of torpedoing the only bid on the table, the German electricity company, E.ON, who did table a bid, was not able to respond in any way. As Endesa shares rose in the market, E.ON was also not permitted to increase its bid or to otherwise change its terms.
Now that Acciona and Enel have shown their hand as concert parties and have expressed their intention to launch an alternative bid, E.ON has suddenly been permitted to increase its bid if it wants to. At the same time, Acciona and Enel have been told that they may not launch their promised bid for six months, meaning some time around August.
In the meantime, Endesa shareholders will be required to decide on E.ON´s bid by its April due date, when its bid expires.
The President of the CNMV has held the line against political interference as best he can, however, all of this together gives the impression that the Spanish takeover rules are either a mess or allow too much scope for intervention and capriciousness.
The fact that with changing circumstances a bidder is not able to adjust its terms and then that shareholders are not able to decide on competing bids at the same time, is absurd!
Onésimo Alvarez-Moro
See article:
Plans by Enel to torpedo a €41bn takeover bid for Spain’s Endesa by Eon of Germany backfired on Friday when regulators stopped the Italian electricity group from launching its own bid until September at the earliest.
In a dramatic twist to the 18-month battle for Spain’s biggest electricity group, CNMV, the national stock market commission, ruled that Eon’s current €38.75-a-share bid was “the only authorised and [legal] offer”.
See full Article (paid subscription required).
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