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24 April 2006 - Spain's Supreme Court suspended the approval of Gas Natural's €22.4bn ($27.6bn) bid for Endesa SA on Friday.
Endesa in February called on the Supreme Court to block the government's conditional approval of the bid, claiming that the conditions the government imposed when it passed the bid have left the operation 'lacking in industrial logic'.
In order for the suspension to take effect, Endesa must pay the court a €1bn guarantee against any damages derived from the suspension, the sources said. _Endesa had already paid a separate €1bn guarantee at the beginning of April to suspend its processing of the bid by a Madrid court.
Endesa has sued in European and US courts to prevent what would be the world's largest hostile takeover of a utility. The court suspension is the second setback in court facing Gas Natural. A commercial court last month ordered a halt to its bid while it investigates an agreement to sell Endesa assets to its main rival, Iberdrola SA. That suspension stalled a rival bid for Endesa by E.ON AG of Germany, as could the new court ruling.
The high court, which had decided to hear the case brought against the bid by Endesa, customarily takes more than a year to make a final ruling.
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