CVC, KKR and Blackstone reactivate the purchase of Endesa with the support of Madrid and Rome
The venture capital funds want to take advantage of the new agreement between Italy and Spain to take over the power plant, an operation for which it already has credits for 15,000 million
Endesa is once again in the spotlight of the big venture capital funds. According to confirmed sources close to the board of the power company, CVC, Blackstone and KKR have rescheduled to gain control of the energy company, currently in the hands of the Italian state through Enel. The good tuning between the governments of Madrid and Rome facilitates the operation, which amounts to 15,000 million euros .
Advisors to both CVC and Blackstone have held meetings to discuss the deal with Borja Prado, the current president of Endesa, named precisely by Enel. But the group's chief executive, who can not take any decision to represent all minority shareholders, has sent them to Enel, which owns 70% of the capital of the second Spanish power company and, therefore, the only one with a real voice and vote To approve or not the proposal. To date, Francesco Starace , CEO of Rome-controlled transalpine multinational, has opposed selling Endesa to private equity funds, especially since the Spanish bank serves as a piggy bank, since under its mandate it allocates 100% of The benefits to dividends.
Starace said in November that do not want to "sell Endesa", but the truth is that its mandate expires next May and its main backer, former Prime Minister Mateo Renzi, is no longer head of government. The next March 20 It will be known whether or not he is in charge of the multinational, although the appointments in Enel tend to be peculiar.In principle, Starace is scheduled to renew as the first executive, but the same said his predecessor, Fulvio Conti, 48 hours before being replaced In April 2014. In fact, in Italy Starace sounds like relief of the current CEO of Eni, the public oil company, involved in a corruption case.
The President of the Government, Mariano Rajoy (d), and the Prime Minister of Italy, Paolo Gentiloni. (EFE).
The President of the Government, Mariano Rajoy (d), and the Prime Minister of Italy, Paolo Gentiloni. (EFE).
According to different sources, the visit of Paolo Gentiloni, Italian Prime Minister, to Mariano Rajoy at the end of January has relaxed the tension. Heads of both governments held a meeting in which they discussed the interest of CVC, KKR and Blackstone, and the two parties said they would not impede the purchase by international funds. On the contrary, Italy could do very well the nearly 15 billion that would enter for its 70% of Endesa, especially given the delicate state of health of some of its banks.
In fact, among the first measures adopted by Gentiloni after being named prime minister on December 11, is the concession of a line of credit of 20,000 million euros the day before Christmas Eve to avoid bankruptcy, among others, Monte dei Paschi Di Siena. A full-blown bailout that will worsen public accounts, already very famished and with a serious problem of structural deficit.
Just a week ago, the European Commission warned Gentiloni that it will impose disciplinary action if it does not stop the deficit from growing until, according to internal forecasts, it reaches 133% of gross domestic product (GDP). The warning puts more pressure on Rome to deliver on its promises made in a letter to the EU executive on 7 February that it has committed to reduce its red numbers by 0.2% of GDP this year through measures Would be adopted by the end of April.
'Spanishize' a covert company
CVC and Blackstone are working on the operation with the shadow help of Goldman Sachs and JP Morgan , as well as having pre-granted lines of credit from several national and international banks, financial sources have confirmed. For its part, Enel has the unofficial advice of Credit Suisse , since the interest of the two venture capital firms has not yet materialized in a firm offer. KKR , who has also probed the operation, has the support of Lazard, who has already traveled to Rome to speak first-hand with the Italian government . The funds have Borja Prado to continue as president - the stock has risen 51.85% since the OPV of November 2014,
Although CVC, Blackstone and KKR are two private equity companies -British and US- which usually operate from lax countries such as Luxembourg , and given the amount to which the Endesa purchase would go - the company capitalizes 21.4 billion - the two funds Would be willing to admit long-term Spanish investors who would take a minority stake, but enough to defend the slogan of Spanishisation of a company that was privatized at the end of the nineties of last century by the Government of Jose Maria Aznar and that Finally ended up in public hands, but Italian.
In addition, following Italy's decision to keep assets in Latin America, Endesa has been closed to an electricity company that can only operate in Spain and Portugal. Their chances of growth are minimal. They barely buy renewable assets for sale by some of the funds that have been made to companies in distress, such as Renovalia or Eolia. From the top management of the group, Endesa is considered to be "in the hood" and has become a dividend cow for Enel.