It is always dangerous to allow management with billions in deposits. They usually find something to do with those billions which don´t seem to have anything to do with shareholder interests.
Onésimo Alvarez-Moro
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Trumpeting plans to splurge €60bn while keeping one’s shareholders onside is a tricky feat to pull off but Eon appears to have done it. The German utility’s new investment budget for the next four years is not far short of what it had offered for Spain’s Endesa. Given the sector’s predilection for empire-building, that would usually spook investors. Instead, Eon’s shares have jumped.
Eon’s valuation has long suffered under a combination of an undergeared balance sheet and fears that the group would overpay for a big deal – the latter concern hardly helped by the Endesa bid battle. Rebuilding a sense of discipline was the main objective at yesterday’s presentations. To that end, two other announcements – one financial, the other more philosophical – balanced the spending plan.
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