Italy's Enel said Friday it is in "advanced" talks with partner Acciona about a possible offer for Spain's Endesa should an extant offer from E.on fail.
Enel, which recently snapped up 24.99% of Endesa's shares, is teaming up with Acciona, which controls another 21%. Enel's stake is the maximum it is allowed to hold without making a mandatory takeover under Spanish law.
The two partners are considering a bid in the event German rival E.On fails to obtain 50% of Endesa's shares. The deadline for E.on's bid is March 29.
A final agreement with Acciona has yet to be reached, Enel said in a statement.
Enel Chief Executive Fulvio Conti has described the move as "friendly," but analysts suggested it was a political move aimed at blocking E.On's bid without any industrial benefit. The Italian and Spanish governments have denied they encouraged Enel to buy a stake in Endesa.