E.on initiates takeover offer for Innogy minority stake

German utility E.on SE (ETR:EOAN) today kicked off a voluntary public takeover offer of EUR 38.40 (USD 46.4) per share targeting the minority stake in Innogy SE (ETR:IGY) not currently held by RWE AG (ETR:RWE).

E.on said in a statement it has launched the offer following its approval by the German Federal Financial Supervisory Authority. The group previously agreed to buy a 76.8% interest in Innogy from RWE.

As expected, the initially announced EUR-40.00 offer value was adjusted to exclude a dividend of EUR 1.60 a share for fiscal year 2017. It continues to include the assumed distribution of EUR 1.64 apiece for fiscal 2018.

The acceptance period will end at midnight (CEST) on July 6, 2018. The takeover offer is not expected to close before mid-2019, subject to clearance by the relevant antitrust and regulatory authorities.

As disclosed in mid-March, the transfer of RWE's Innogy stake is one piece of a far-reaching exchange of assets, as part of which RWE will get substantially all of E.on's renewables activities, including Innogy's own renewables business, and a 16.67% stake in E.on. In addition, RWE will keep Innogy’s gas storage business, a stake in Austrian utility Kelag, and get minority stakes in two RWE-operated nuclear power plants.

Once the larger transaction concludes, RWE will have about 8 GW of generation capacity from offshore and onshore wind, as well as hydro and photovoltaics (PV) assets. This will make it the number-three renewables player in Europe and number two in terms of wind power, it said in March.

From E.on's point of view, the takeover of Innogy will beef up its profitability and boost its potential for future growth, CFO Marc Spieker commented today.

(EUR 1.0 = USD 1.208)

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