Centrosolar sees M&A interest, but not now

FRANKFURT Wed Feb 2, 2011 10:09am EST

FRANKFURT (Reuters) - German solar company Centrosolar, often the subject of M&A speculation, expects to attract the interest of larger market players, although not in the short-term, its chief executive said.

"I think that a big company will approach us at some point," Alexander Kirsch told Reuters in an interview on Wednesday.

"But I wouldn't buy the shares because of M&A speculation," he added.

Some investors took a different view. The company's shares rose as much as much as 5.4 percent after these comments.

They were up 3 percent at 1254 GMT, outperforming the 0.4-percent rise in the global FTSE cleantech index.

"The comments are cautious but you can see that investors take quite seriously any M&A remarks," a Frankfurt-based trader said.

Along with solar equipment manufacturers Roth & Rau and Manz, analysts see Centrosolar as a possible M&A target in the renewable sector.

Shares in the company soared last year, when rumors surfaced that Robert Bosch GmbH -- which had previously acquired renewable energy companies Ersol and Aleo Solar -- might make a bid.

Over the past year, Centrosolar's stock has jumped 38.50 percent, compared with a modest 3.2 percent gain by the FTSE cleantech index.

Speculation has also been fueled by Centrotec, which owns a 26 percent stake in Centrosolar and has said in the past that it did not rule out a sale of the stake in the medium to long term.

Analysts have pointed to Centrosolar's strong presence in foreign markets as an attractive asset, setting it apart from peers who struggle to diversify in light of a shrinking market in Germany, the world's largest for the industry.

Earlier this month, the company earlier signed a solar manufacturing agreement with top contract chipmaker TSMC under which it will be the exclusive European maker of crystalline solar modules for TSMC.

Centrosolar trades at 6.5 times estimated 12-month forward earnings, Thomson Reuters StarMine shows, a slight premium to peer Phoenix Solar's 5.8 times, but at a discount to SolarWorld.

(Editing by Jane Merriman)

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