Enel to Float a Further Endesa Stake

MADRID-- Endesa said Wednesday that its parent company, Enel SpA, plans to float an additional stake of between 17% and 22% in the Spanish power utility on the Madrid stock market.

The share sale should begin on Nov. 7, Endesa said in a regulatory filing. Enel, Italy's largest electricity company, currently owns 92% of Endesa with the rest of the shares traded in Madrid.

Floating more of Endesa, one of Spain's biggest electricity firms, would increase the stock's limited liquidity and enhance the value of the company, Enel said.

"This is an important milestone, in that we are now delivering on the undertaking we gave to the market in the summer to unlock value within the group and to increase our focus on the new energy market framework that emerged in Iberia," Enel Chief Executive Francesco Starace said.

The shares will be offered to Spanish retail investors as well as international and Spanish institutional investors.

The announcement of the share sale comes just days after Enel took over Endesa's Latin American unit and Endesa distributed an unusually large EUR14.6 billion ($18.2 billion) dividend that went mostly into Enel's coffers. The move was widely criticized by Spanish politicians.

Enel took over Endesa in 2007 after a multiyear bidding battle with Germany's E.ON AG and just before Spain plunged into a deep economic slump. Spain's then-Socialist government came under fire for allowing state-controlled Enel to acquire Endesa, which had been privatized just a few years before.

In July, when it announced plans to take over Endesa's Latin American business, Enel said it wanted to simplify its corporate structure and align it with the company's objectives. To that end, Enel said it would design a new business strategy for Endesa, looking to take advantage of the Iberian Peninsula's improving economy.

Banco Santander SA, Banco Bilbao Vizcaya Argentaria SA, Credit Suisse Group AG and J.P. Morgan Chase & Co. are joint global coordinators on the deal, while Goldman Sachs Group Inc., Morgan Stanley and UBS AG are joint bookrunners. Mediobanca SpA is advising Enel.

Eric Sylvers contributed to this article.

Write to David Román at [e-mail] and Ana García at [e-mail]

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