Jose Luis Rodriguez Zapatero, Spain's Prime Minister, may be warming to the idea of a possible takeover by French state-controlled electricity giant EDF of ScottishPower-owner Iberdrola, his country's biggest utility.
Zapatero, whose remarks on the subject were published yesterday in a Spanish newspaper, signalled that conditions were now ripe for EDF to enter Spain's energy market and that he expected talks to take place after the country's presidential elections on March 9.
EDF has already stated that it is interested in buying into the Spanish power market, and has admitted it held talks with Spanish construction group ACS, which controls 13% of Iberdrola.
While no deal was reached, the Bilbao-based utility has been at the centre of a tornado of takeover speculation in recent weeks. Germany's E.ON has also been named as a potential predator.
Iberdrola shares, which are widely held in Scotland following the £11.6bn takeover of ScottishPower last year, have rocketed around 20% in the past year - more than 6% of it in the past month alone - amid the takeover rumours.
Shares in Iberdrola yesterday climbed 0.6% to 9.92.
Zapatero said he had not spoken specifically about Iberdrola with French president Nicolas Sarkozy.
"It's one of the possibilities, but not the only one, right? I think we will have something on the table within the next few months - or from the 10th onwards," Zapatero said.
"But what is evident is that we have a good relationship with France and we will look for a good situation in the energy area."
Zapatero's remarks will likely not sit well with Iberdrola chief executive Ignacio Sanchez Galan, who recently said he would square up to anyone who threatened the company's independence and, with characteristic directness, that EDF would not be welcome as a shareholder.
"EDF is not welcome from a political point of view nor from a social point of view, nor from a union or shareholder point of view," Galan said.
Nonetheless, Zapatero's remarks coincide with the European Court of Justice's ruling this week against Spain's efforts to shield energy utility Endesa from a foreign takeover bid - which could make a move by EDF in Spain that much easier.
The court ruled that Spain had violated European Union antitrust rules because it did not obey EU orders to remove roadblocks to E.ON's bid for Spanish electricity company Endesa in 2006.
The Spanish government had favoured a Spanish suitor for Endesa, even though management opted for the E.ON offer.
Endesa was eventually acquired by Acciona and Italy's Enel in a deal last year.
Zapatero added: "We will respect European and Spanish laws, but for obvious reasons, because we are dealing with energy, governments will always have something to say."
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