April 27, 2018 / 3:07 PM / 4 months ago

Czech investor poses new challenge to German carve up of Innogy

FRANKFURT/PRAGUE (Reuters) - Investment group KKCG plans to bid for the Czech assets of German energy group Innogy (IGY.DE), posing a new challenge to a deal between Innogy’s majority owner RWE (RWEG.DE) and rival German utility E.ON to carve up Innogy themselves.

FILE PHOTO: A charging box for electric cars is pictured in front of the headquarters of the German power supplier RWE in Essen, Germany, April 24, 2018. REUTERS/Wolfgang Rattay/File Photo

E.ON (EONGn.DE) on Friday published its 5.2 billion euro ($6.3 billion) takeover offer for the 23.2 percent of Innogy that RWE does not own, worth 40 euros per share including dividend payments to Innogy shareholders for 2017 and 2018.

Shareholders have until July 6 to accept the offer.

RWE and E.ON in March unveiled comprehensive plans to break up Innogy and divide its assets, turning RWE into Europe’s second-largest wind utility and E.ON into Europe’s largest operator of gas and power networks.

But other investors are looking to muscle in on the deal.

Last week, sources familiar with the matter told Reuters that Australia’s Macquarie (MQG.AX) was interested in buying some of Innogy’s assets, including the stake in a Czech gas networks unit it does not already own.

On Friday, Czech investment group KKCG, which has interests in gas extraction and storage, said it also planned to make a bid for Innogy’s Czech assets, which include a gas distribution network, storage facilities and gas and electricity trading.

KKCG said that needn’t disrupt RWE’s and E.ON’s plans.

“A potential sale of Innogy’s Czech activities is in line with an earlier agreement ... on the split of Innogy that the parent RWE concluded last month with its competitor E.ON,” KKCG said in a statement.

However, RWE and E.ON don’t seem keen on any side deals.

E.ON said in its offer document that RWE would offer to buy Innogy’s stake in Czech Innogy Grid Holding, which E.ON would then have an option to buy.

And E.ON’s finance chief told Reuters he believed his firm would end up owning the Czech operations.

“We are very interested in integrating Innogy in its entirety. And that includes the Czech gas business. I am confident that the Czech gas business will eventually find its way to E.ON. Provisions have been made in our contracts for this,” Marc Spieker told Reuters.

Innogy and E.ON declined to comment on KKCG’s statement.

Innogy’s management and supervisory boards will publish their recommendations on E.ON’s offer within the next two weeks. They have urged shareholders not to take any action until then.

Innogy’s shares closed little changed at 36.28 euros.

The E.ON-RWE deal, expected to close in late 2019, is seen resulting in as many as 5,000 job cuts as E.ON targets 600-800 million euros in synergies.

E.ON boss Johannes Teyssen has said he hopes job reductions can be done without forced redundancies.

Reporting by Christoph Steitz, Maria Sheahan, Jan Lopatk aand Tom Käckenhoff; Editing by Jane Merriman and Mark Potter

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