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Enel expects to receive binding offers for Slovanske Electrarne (SE) within a month, its CEO insisted on October 30. That looks optimistic, as the list of potential suitors for the Slovak utility looks to have dwindled in the face of the government pressure to grab a bigger say or stake, geopolitics, and a problematic nuclear project.

Speaking at an Italian parliamentary hearing, Francesco Starace, head of the Italian energy group, said Enel still expects binding offers for SE by the end of November, according to Reuters. Enel announced in July plans to sell its 66% stake in the national utility, as well as Spanish and Romanian assets, by the end of 2014 in order to ease its debt burden. 

Starace told the hearing Enel also expects binding bids for Spanish Endesa and its Romanian distribution and generation assets by the end of November. He reported that ratings agencies have told the group to cut its debt quickly in order to maintain its current standing.

Dwindling field

However, initial expectations of a highly competitive race for SE have disappeared, with Russian potential suitors falling victim to geo-political realities, and others talking down the prospects of an acquisition.

In the immediate aftermath of the announcement that SE would be sold, the Slovak media was awash with suggestions that a Russian buyer was lined up. A surprising deal that saw Russian state-owned banking giant Sberbank hand SE a giant €870m loan the previous month drove the speculation, with a little help from Bratislava's clear sympathies with Moscow as Russia's relations with the EU and US deteriorated. 

However, Bratislava has been brought back into line as the Ukrainian crisis worsened and a Russian purchase is now out of the question. Meanwhile, suitors from the West are scarce to say the least, with European power markets in a dreadful state and recession fears once again stalking the Eurozone. 

The Slovak state, which holds 34% in SE, has not helped whip up interest either. Prime Minister Robert Fico - a stanch opponent of privatisation - has made it clear that Bratislava wants more say in SE. Economy Minister Pavol Pavlis reiterated in mid-October that the government would like to buy at least some of the Enel stake, although the empty state coffers would make that challenging. 

At the same time, the Italian group's privatisation of SE in 2006 was put under investigation almost immediately following the sale announcement. That pressure likely stems from the running battle Fico has fought with Enel over the delayed and over-budget project to expand the Mochovce nuclear plant. 

Frontrunner

All of which has left Czech utility CEZ as the front runner. However, with the state-controlled Czech company now looking likely to resurrect a €10bn tender to expand its own nuclear capacity, and still licking its wounds over a botched attempt in the last decade to build itself into a regional giant via acquisitions, it has appeared to be backing off from previous enthusiasm for the deal.

Reiterating recent comments on the complexity of SE's assets, CEZ CEO Daniel Benes told Reuters in comments published on October 24 that the Czechs see significant risks attached to SE. 

"I don't think it is quite likely that CEZ would submit a bid for the 66% stake in Slovenske Elektrarne," Benes said, "and take over Enel's role without any additional solution of [the] risks. It is unlikely CEZ would do that."

The CEO also said CEZ - which has also come under pressure from Andrej Babis, the power finance minister who effectively took control of the company's board in September - won't bid against the Slovak state. Instead, he suggested that Enel may have to stay in Slovakia, given the complexity of the Mochovce project.

All of which may leave Czech-based energy group Energeticky a prumyslovy holding (EPH) as the dark horse. The holding, which is controlled by closely-held Slovak financial group J&T, has a voracious appetite for energy assets in the region, and most importantly, appears to have found a way of working in cooperation with the prickly Fico.

EPH bought a 49% stake and management control in national gas utility SPP from E.ON SE and GDF Suez last year for €2.6bn. In June, Bratislava bought EPH out of the loss-making gas importing unit, leaving the holding with the distribution business and transit pipeline operator Eustream, the most lucrative part of the business.