Finessing Fenosa

29 May 2003

The main proponent of the change is reportedly Santander, which has built up a 24% stake in the Spanish utility. An exit may be coming soon. After so many fits and starts, consolidation in the utilities sector could be about to start to again.

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Spain's third biggest utility, Union Fenosa, says it wants to eliminate measures that protect it against hostile takeovers, including a limit on shareholders' voting power. The proposed change would abolish current rules whereby an investor's voting power is capped at 10%, no matter how large the stake.

The company said its board would put the proposal to shareholders at a meeting on June 17. The rule that board members have to have been shareholders for three years would also be scrapped.

Union Fenosa's largest shareholder is Santander, with a 24% stake. Other core shareholders include Caixa Galicia (7%) and Banco Pastor (4%). The highly indebted company has large investments in Latin America and just under 20% of Spanish telecommunications group Auna.

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