CEZ Must Look at Enel’s Slovak Assets, Minister Says

CEZ AS has a duty to assess a possible bid for Enel SpA (ENEL)’s Slovak unit, which is being offered for sale by the Italian utility, the Czech trade minister said.

Combining the two utilities “would make a lot of sense” as it would re-establish the power company that existed before Czechoslovakia split into two separate countries in 1993, Industry and Trade Minister Jan Mladek said today in an interview after a news conference in Prague.

Enel, the largest Italian utility, said on July 10 it will seek to sell its Slovak and Romanian assets in a bid to reduce its debt by 4.4 billion euros ($6 billion). CEZ Chief Executive Officer Daniel Benes said in April he regretted that the Czech company hadn’t bought Slovenske Elektrarne AS when it was for sale in 2006 and that he’d be open to bidding for Enel’s 66 percent stake.

“After CEZ management analyzes the offer, the state as its main shareholder will decide whether to go for it or not,” Mladek said. The government controls about 70 percent of CEZ’s shares.

Enel stock jumped 3.4 percent to 4.25 euros in Milan, rebounding from a two-month low. CEZ shares fell 0.3 percent to 584.1 koruna in Prague, reversing earlier gains.

Potential Bidder

Rosatom Corp., Russia’s state nuclear company, was cited as another potential bidder in media reports including Slovakia’s Sme and Hospodarske Noviny newspapers. CEZ spokeswoman Barbora Pulpanova said that while the company was interested in the Slovak market, it won’t comment on any particular deals.

Enel bought the stake in Slovenske Elektrarne for 839 million euros, pledging to invest another 1.9 billion euros in the company during 10 years. As part of the deal, Enel pledged to finish the construction of two nuclear reactors at the Mochovce atomic power station, a 3.9 billion-euro project beset by delays and budget overruns.

In April, CEZ canceled a tender for a $15 billion plan to build two new reactors as its Temelin nuclear power station after the government refused to provide guarantees on power purchase prices. The country will probably build only one reactor at Temelin and one at the Dukovany plant in the future, Mladek said today.

To contact the reporter on this story: Ladka Bauerova in Prague at lbauerova@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Andrea Dudik

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