Endesa's Position on Gas Natural Takeover Bid
September 06 2005 - 4:20PM
Business Wire
Endesa's (NYSE:ELE) Board of Directors, in a meeting held today,
has analysed the terms of the tender offered by Gas Natural.
According to the available information, the Board has considered
convenient, for the benefit of the general interest, its
shareholders and its employees, and the market, unanimously express
a preliminary evaluation of the transaction in the following terms:
1. The transaction proposed by Gas Natural has been presented in a
hostile way without any previous knowledge by Endesa. 2. The layout
and the structure of the offer introduce elements of uncertainty
rendering it impossible to determine with detail enough the real
value of offered price. In any case, a first evaluation determines
that the economic terms of the offer are clearly insufficient and
do not reflect by any means the fair value of the Company. 3.
Considering the applicable legislation and existing precedents in
the Spanish and in the European Community, the transaction may be
hardly compatible with the current regulatory and antitrust regime.
Therefore, there are risks not taken into consideration that could
imply significant adverse consequences to Endesa's shareholders. 4.
The layout of the transaction in a time where a full review of the
electricity regulation is taking place is particularly surprising
and worrying. Furthermore, the preliminary conclusions of the
mentioned review seem to be completely opposed to the proposed
transaction. 5. The participation in the transaction of the main
Company's competitor under the proposed terms presents serious
concerns regarding the protection of minority shareholders'
interests. Furthermore, this participation does not comply with
Spanish and European Community existing antitrust decisions. This
preliminary evaluation is without prejudice to the report that
Endesa's Board of Directors should issue in case of the approval of
the tender offer by the CNMV (Spanish Stock Exchange Commission)
after obtaining the remaining pertinent administrative
authorizations, in compliance with the article 20.3 of Royal Decree
1197/1991, issued on 26th of July of 1991, on the Takeover Bids
Regime. The Board of Directors endorses its commitment to the
Company's Business Plan on a stand-alone basis, since it's one of
the five European largest electricity groups, the first private
electricity Company in Latin America and the leader in the Iberian
market, and it has a solid, adecuate and ongoing Strategic Plan
which ensures growth and profitability. Considering all the above
mentioned, the Board of Directors will adopt all available legal
actions in order to defend both Company and shareholder's
interests.
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