Which are prior to the European directive

The new law on takeover approved Friday by the Spanish Government ("Les Echos" from October 12) not will take effect before the spring of 2007, with a year's delay on the date on May 20, 2006 deadline for the "transposition" of the European directive on public offers to purchase. In any case, the markets already know what to keep: the text will be discussed in Parliament through the"emergency" and its approval is provided by the Socialist Party (PSOE), which has an absolute majority.

The lowering of the threshold for triggering a mandatory takeover bid, which bid on the 100 of the capital becomes unavoidable, is the main novelty. This threshold was set at "30 of the voting rights", while the current bar is located at "50 of the capital. About the OPA partial 10, currently required once a shareholder control more than 30 of the capital, in the future they will be only "volunteers".

To facilitate the transition, it is expected that a controlling shareholder already between 30 and 49.99 of a company listed on the coming into force of the Act will not have to launch a takeover bid on 100 of the capital. Unless he acquires 5 in the period of one year or if its participation exceeds 50.

According to analysts, the new law could have a very significant impact on major current in the electrical sector operations, in particular allowing builders groups ACS and Acciona to 29.99 their respective interests in the capirtal of Endesa and Iberdrola, without having to launch a takeover bid partial 10.

"Rule of reciprocity".

ACS could do so more easily to the Union Fenosa and Iberdrola merger he already controls 40 of the capital. For its part, Acciona would be better placed to defeat the objective of the German E.ON, which launched a takeover bid on 100 of Endesa but determines the success of the operation to the acceptance of at least 50 of the capital. "The possible establishment of a Spanish hard core around Acciona and a strong reduction of floating capital of Endesa would hit hard the German operation", predict analysts.

In the future, the Spanish groups are better able to protect themselves against hostile foreign operations: If approved by the General Assembly of shareholders and communicated to the "Constable" of markets, the CNMV, all measures of defence will be perfectly lawful.

The Act approved Friday also provides that if the author of the OPA is a foreign armed group itself against hostile operations, the Spanish group may proceed in the same manner, "without limitation", the "rule of reciprocity."

But for reasons of "legal certainty", the future regulation will have no retroactive effects. Thus, for example, the "rule of reciprocity" will not affect the respective shields of Endesa and E.Which are prior to the European directive.

The interests of minority shareholders will be also better protected, especially when it comes to the sale of control packets. The objective here is to avoid new controversial operations such as those carried out by Santander and BBVA, with sale respectively Dragados to ACS and Vallermoso to Sacyr, priced very superior to the market value, without any direct benefit to the minority. Similarly, when a shareholder will control 90 of a company following a takeover bid, 10 of the remaining capital will be the subject of a "forced to purchase and sale process", at a "fair price" for both parties (with the "arbitration" potential of the NCVM). Which could lead, provide experts, an avalanche of rating assignments...