Enel buys 9.99 pct of Endesa at 39 eur/shr UPDATE

Enel buys 9.99 pct of Endesa at 39 eur/shr UPDATE

	Published : Wed, 28 Feb 2007 09:21 By : Agencies Print this Story

(update with newspaper reports saying that Enel may hike stake to 24.9 pct)

MILAN (AFX) - Enel SpA said it completed yesterday the purchase of a 9.99 pct stake, or 105.9 mln shares, in Endesa SA at 39 eur per share.

The investment totals 4.126 bln eur.

Enel said the acquisition is part of its 'strategy aimed at strengthening the company's position on the European electricity market.'

Endesa is currently the target of a 38.75 eur per share bid from E.ON AG.

Trading in Endesa shares was suspended last night after rumours emerged last night that Enel was considering buying a 5-10 pct stake in the Spanish utility.

In a statement, Spain's stock market regulator said trading will be suspended 'until the circumstances surrounding the possible acquisition of a significant stake (in Endesa) by Enel are clarified.'

Italian newspaper Il Sole 24 Ore said that the shares were bought through UBS and the operation agreed with the Spanish establishment to block E.ON's bid.

Spanish groups Acciona SA and Caja Madrid respectively have 20 pct and 10 pct of Endesa.

Newspaper reports said that Enel could increase its stake in Endesa to 24.9 pct, the threshold after which it would have to launch a bid to buy out minority shareholders.

The daily La Stampa said the stake could be increased when a restriction on voting rights for foreigners is lifted. Currently, voting rights are frozen at 10 pct of Endesa's capital.

La Stampa added that the acquisition was approved by Italian prime minister Romano Prodi and his Spanish peer Jose Luis Rodriguez Zapatero at a bilateral meeting in Ibiza on Feb 20.

philip.webster@thomson.com

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