Could Enel sell control of Endesa to a group of investment funds? This was stated on Wednesday morning by the Spanish online newspaper El Confidencial. The Enel share shines in Piazza Affari and marks the best performance of the Ftse Mib with an opening +1,5%, in a market that rises by 0,4%. Endesa, in turn, leapt by 3,3% in Madrid. The operation, according to the newspaper, is worth about 15 billion. But the Italian group, in mid-morning, cut short the rumors with a sharp denial: "Enel, once again, denies any indiscretion relating to the possible sale of Endesa". “It is old speculation without foundation.”
El Confidential writes that a group of private equity funds - CVC, Blackstone and Kkr - have already started meetings with Borja Prado, current president of the Spanish utility (controlled by Enel after the takeover launched successfully in 2007) which has reportedly filed the dossier in the hands of Enel. The operation would have the approval of the governments of Rome and Madrid as reported by the Spanish newspaper.
The private equity group would already have the necessary credit for the operation, i.e. 15 billion euros at Endesa's current prices). CVC, Blackstone and Kkr are reportedly working with the advisory of Goldman Sachs, Jp Morgan and Lazard. The deal, write the Equita analysts, could also be supported by the Italian government to reduce the pressure on the public debt (which would imply a hypothesis of an extra dividend in the event of the sale of Endesa).
However, it should be remembered that during the November 2016 strategy plan, Starace had firmly indicated that he had no intention of selling Endesa, “but we believe – they write – that the decision actually depends on the sale price. At current market values (20,18 euros against the consensus which has a target price of 20 euros) a deal would imply a cash in of 15 billion for Enel, which could open the door to a potential extraordinary dividend (both to improve the capital that would be too de-leveraged, both to allow a cash in to the Government)". For Equita, "the news is positive for Enel and also for Endesa: the purchase would imply the obligation to make a takeover bid".
