|Author (Person)||Frost, Laurence|
|Series Title||European Voice|
|Series Details||Vol.7, No.29, 19.7.01, p25|
COMPETITION chief Mario Monti faces another tough call as he decides whether to open an investigation into the involvement of French state-owned power company EdF in the hostile bid for Italy's Montedison.
The commissioner is expected to decide soon whether to launch a probe, thereby suspending part or all of the voting rights of bidding consortium Italenergia. Monti is under political pressure from EU governments and fellow commissioners who want to suspend EdF's acquisitions until France acts to break its protected near-monopoly at home by liberalising markets.
His services are being lobbied by the Italian energy conglomerate to scrutinise the Italenergia consortium. Established by EdF, motor giant Fiat and three Italian banks, Italenergia already holds 52% of Montedison.
The group is optimistic that the Commission will intervene. "We're convinced there's at the very least good reason to investigate the nature and effect of the tender offer," said a source close to Montedison.
EdF and Fiat claim the Italenergia bid is not subject to Brussels clearance since neither the consortium nor any majority shareholder has a turnover above the €5 billion EU review threshold.
But Montedison's lawyers say they now have evidence to support their suspicion that the consortium is acting as an EdF take-over vehicle. They maintain the exchange of half of EdF's 20% Montedison stake for small energy firm Fenice greatly overvalued the Fiat asset.
The deal was not notified to the EU executive despite EdF's statement on 2 July that it would be "subject to European regulatory procedures". The suspension of voting rights triggered automatically by Commission intervention could enable Montedison to fight off the hostile bid at a crucial shareholders' meeting on 9 August - or to win support for any friendly counter-bid that materialises.
EdF said it would cooperate fully with any investigation. "Whatever happens will be of greater concern to Italenergia than to us," said company number-two Gérard Wolf. "We're only a minority stakeholder."
Competition chief Mario Monti faces another tough call as he decides whether to open an investigation into the involvement of French state-owned power company EdF in the hostile bid for Italy's Montedison.
|Subject Categories||Internal Markets|