E.ON has raised its offer for Endesa a third time to €40 a share and won the backing of the Spanish company’s board.

The German power giant also launched legal action against Acciona, the Spanish conglomerate, and Enel, of Italy, to try to prevent them counter-bidding for Endesa. The bid values the company at €42.3 billion (£28.6 billion).

“The board decided unanimously to value favourably E.ON’s €40 bid . . . and recommend shareholders sign up,” Endesa said, adding that its board members would sell their shares.

As soon as E.ON made its fourth and final bid yesterday, Enel and Acciona tried to trump it, saying that they would offer at least €41 per share if E.ON failed to get the 50 per cent of Endesa shares that it needs.

Spanish stock market regulators have barred Enel and Acciona from making an offer for Endesa for at least six months, but the two companies are hoping that the prospect of a sweeter bid in future will prevent Endesa shareholders from taking up E.ON’s offer.

A furious E.ON launched an all-out legal offensive yesterday in Spain and New York to halt Enel and Acciona’s blocking tactics. It asked Spanish stock market regulators to open infringement procedures against them for market disruption, breach of tender offer rules and insider trading, saying that their “unlawful actions” were designed to deceive Endesa’s shareholders and manipulate the market price of Endesa stock.

E.ON demanded that both companies be forced to divest the 46 per cent stake that they have amassed in recent weeks as E.ON’s bid was tied up in legal and bureaucratic wrangling. E.ON also wants Spanish regulators to prevent both companies from making any offer for Endesa at any time.

Spanish stock market regulators said that they would rule on Enel and Acciona’s moves before trading starts today.

Wulf Bernotat, E.ON’s chief executive, welcomed Friday’s ruling by Spanish stock market regulators that Acciona and Enel had violated Spanish tender offer rules. Appealing to shareholders to ignore Enel and Acciona’s last-minute moves, he said that he was “convinced that our increased offer at €40 per share will be the only one for Endesa in the fore-seeable future”.

Endesa is seen as a key prize by European power companies hoping to be one of the handful of players left when the present wave of consolidation ends. All European households will be able to choose their electricity supplier by July 1. The biggest winners have been Endesa shareholders, who have seen the value of their stock double during the 18-month battle.

The first offer for Endesa was made in September 2005 by the Barcelona-based Gas Natural for €21.30 a share. In February last year, E.ON offered €27.50, raising it to €35 in September, €38.75 in February this year and €40 a share yesterday. E.ON also extended the deadline for Endesa shareholders to take up its new offer until April 3 in Spain and April 6 in New York.

Trading in Endesa’s shares has been suspended since Friday, when Enel and Acciona said that they were in “advanced talks” to make a joint bid for Endesa.

Power play

September 5, 2005 Gas Natural, of Spain, offers €21.30 per Endesa share

February 21, 2006 E.ON, of Germany, offers €27.50 per share

September 25 Acciona, of Spain, buys 10 per cent of Endesa at €32 a share

February 3, 2007 E.ON raises its offer to €38.75 a share

February 27 Enel, of Italy, buys 10 per cent of Endesa at €39 a share. Later it increases its stake to 22 per cent to become Endesa’s largest shareholder

March 23 Enel and Acciona say that they are planning a joint bid for Endesa

March 25 E.ON raises its offer to €40 a share and launches legal offensive to halt Enel and Acciona. They vow a future offer of at least €41 a share

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