Powerless to prevent it, Montedison’s Board of Directors met yesterday in Milan and reluctantly agreed to call a shareholders meeting at which the Italenergia consortium led by Fiat and Electricite de France will seek to dismiss the present directors and appoint a new board. Earlier objections to the validity of the request were overruled with the shareholders meeting, which will take place in Milan on August 9, being called pursuant to Article 2367 of the Italian Civil Code.
Italenergia owns 52 per cent of Montedison but the board has rejected its 6.5 bn Euro ($5.5 bn) take-over bid.
Italenergia comprises the following companies: 38.61 per cent Fiat; 20.01 per cent Carlo Tassara SpA; 18.03 per cent Electricità¯¿½e France; 9.55 per cent Banca di Roma SpA; 7.81 per cent NHS, a holding company controlled by Sanpaolo IMI SpA; and 5.99 per cent IntesaBci SpA.
Last week, Fiat said it expected Italenergia’s take-over bid for Montedison and Edison to be launched in the second half of July after approval by the stock market authority Consob for its offer of 2.82 Euro per share for Montedison and 11.60 for generating subsidiary company Edison.
Over the next month, however, Montedison and its main ally, investment bank Mediobanca are expected to set up numerous legal road blocks that could undo the joint bid from Fiat, Italy’s largest manufacturing group, and French state-owned EdF.
Efforts by EdF to gain a foothold in the liberalized Italian electricity market have met with strong opposition from those who object to the loss of control to a foreign state-owned group. The Milan government reacted to EdF’s stakebuilding in Montedison by seeking to impose a restriction on voting rights since the French domestic electricity market is not sufficiently open to competition.
Montedison’s board are expected to argue that Fiat has an agreement with EdF that they can increase their ownership beyond the present 18 per cent – giving EdF control over important generating assets. EdF have dismissed the suggestion, but the Italian authorities will undoubtedly fear that Fiat are acting as a ‘Trojan horse’, concealing long-term plans by EdF to develop power generation in Italy.