Montedison accepts bid

July 23, 2001 Posted: 0628 GMT

LONDON (CNN) -- The board of Italian energy conglomerate Montedison agreed to accept a new higher takeover offer of $4.9 billion from a Fiat-led group.

Italenergia, which groups Italian automaker Fiat, French utility Electricite de France and three Italian banks, increased its offer to 3.16 per share, valuing Italy's No. 2 power company at about 5.7 billion ($4.9 billion).

Montedison's acceptance of the new revised offer, the original offer valued each Montedison's share at 3.07, puts an end to an acrimonious and hostile battle that pitched two of Italy's corporate giants against each other.

Fiat, owned by the Italy's best-known industrialists, the Agnelli family, scored a major coup over Montedison's shareholder Mediobanca, the most powerful investment bank in Italy. 

Montedison said late on Sunday it would advise Mediobanca, which saved the power company from bankruptcy in the 1990s and holds a controlling stake, to accept the offer from Italenergia.

Fiat and EdF, which bought a 20 percent Montedison stake in a surprise move in May, want a piece of the fast-growing electricity sector in Europe's fourth-biggest economy.

Italenergia said its offer for the jewel in Montedison's crown energy group Edison remains unchanged at 11.60.

Montedison, which owns 61 percent of Edison, no longer plans to pursue legal measures to block Italenergia taking it over. The battle moved to Brussels on Friday, where the European Commission – the executive arm of the European Union – said it would review the bid on competition grounds.

That decision would have had the effect of freezing the voting stock held by Italenergia, which now holds 52 percent of Montedison ordinary shares.

Montedison had been hoping an Italian administrative court would rule in its favor against securities regulator Consob which last week gave the go-ahead for Italenergia's bid. The court had been expected to issue a provisional ruling in the case on July 25, the day before Italenergia's offer begins.

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