The climate is less tense and less confrontational

Change of tone and tactics. On the eve of the first meeting between Jacques Chirac and Romano Prodi in her new clothes of head of Government , tomorrow in Paris, the Italian electrician adjusts the shooting on the Suez-Electrabel folder which has poisoned whether relations until the legislative elections in April. Unlike stock speculation of weekend, Enel has no intention to reactivate the "atomic threat" of a takeover bid to 50 billion euros on Suez.

He played rather calm and political map of a "negotiated solution" on a portion of the assets of Electrabel (98.6 subsidiary of Suez) building on the relaxation of the climate between Paris and Rome. More than a change of perspective, it is a logon attempt, even if it does not appear to have even met many echo in France.

"The climate is less tense and less confrontational." Expected a signal of Jacques Chirac. "If agreement on all or part of the assets of Electrabel, there is more need of OPA", says, this weekend at the headquarters of the Italian group. Without abandoning its growth targets, Fulvio Conti group evokes now three possible scenarios for opening direct negotiations with Suez.

The first, perhaps the most unlikely, would be to convince the management of Suez cede the entire Electrabel, a "correct price" for its current value of EUR 23 billion. Enel has never hidden his interest in the Suez energy pole that represents his only EUR 1.9 billion of net income to net sales in 2005 EUR 12.2 billion. Its direct assignment would avoid the use of a public offer and the risk of a dismantling of Suez, the French group is refocusing ipso facto on the trades of the water and the environment.

Preferential solution

The second "hypothesis of school", which now seems to regarded as preferred by the Italian group solution, would be that of a capital and a "joint management" sharing of Electrabel. In this case, the floating very reduced of Electrabel, whose only 1.3 shares are listed on Brussels, could be expanded to 20 for co-management of the society, 40-40, between Suez and Enel. For the Italian group, such a transaction would allow it to significantly strengthen the weight of its activities in Europe while creating synergies between the two partners.

Finally, where the French group would not be convinced by this scenario, the Italian could simply recovery of part of the assets of Electrabel, through the opening of the capital of some plants and Distrigaz, its sister company specializing in the natural gas trading and sixth gas in Europe operator.

Aware of the strength of the initial opposition of Suez in any discussion with Italian rival Enel takes good care to clarify that it is "assumptions of school". But the Italian group visibly on the weakening of the position of Dominique de Villepin, seen as the main architect of the merger Suez-gas of France, and the growing difficulties encountered by the project franco-français, to return to the support and convince the CEO of Suez, Gérard Mestrallet, to move to the negotiating table.

This change in tactics may have been, in part, inspired by Romano Prodi, whose entourage was not privy to criticize the "clumsiness" of the Managing Director of Enel, Fulvio Conti, before the elections. "We are interested by a strong collaboration with the France." "There may be beneficial solutions for both groups," suggested, Friday, the new Minister of economic development Pierluigi Bersani.