Saving Conti's face

15 March 2006 By Hugo Dixon Follow @hugodixon

Having stirred up a political hornets nest, Enel s Conti will look foolish if he doesn t actually bid for Suez. But his board should only authorise a war if it is satisfied that a combination would have compelling logic.

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Enel's board is expected to meet at the weekend to approve a bid for Suez, according to a person familiar with the situation.

This follows the failure of the Italian and French finance ministers to resolve their differences over whether Enel should be allowed to buy Suez at a meeting in Brussels on Monday. Some observers had hoped that the finance ministers would broker a deal between the companies allowing Enel to acquire some of Suez's assets.

Enel has already lined up around E50bn of loans to finance a bid from a consortium of banks. If it asks for a firm commitment of funds, it will pay about 4 basis points and a further 12 basis points for subunderwriting.

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