Uniper willing to talk to Fortum after rejects bid

FRANKFURT/DUESSELDORF (Reuters) - German energy group Uniper UN01.DE rejected an 8.05 billion euro ($9.5 billion) takeover bid from Finland's Fortum FORTUM.HE on Tuesday but will hold talks as it seeks a higher offer and more commitments to the company's future.

Uniper remains opposed to the deal, claiming Fortum’s bid undervalues the company, and fears the state-controlled Finnish group might chose to break it up should its bid succeed this time after a failed attempt over the summer.

However, Uniper is at loggerheads with its main shareholder E.ON EONGn.DE which has struck a preliminary agreement to sell the 46.65 percent stake it retained after a spin-off last year.

Uniper sees the 22 euro per share bid as too low and argues it does not include a control premium, which would suggest an offer of more than 27 euros per share based on past cash transactions in Europe.

“Fortum’s offer is unacceptable as it does not reflect Uniper’s true value,” Uniper Chief Executive Klaus Schaefer said, also pointing to the group’s current share price of 23.8 euros apiece.

They traded at only 10.015 euros when first spun off from E.ON in Sept. 2016 and were still below 18 euros when reports of a Fortum bid first emerged at the end of May.

Schaefer did say that talks with Fortum would continue in hopes of extracting more commitments for Uniper’s future, adding he would meet Chief Executive Pekka Lundmark this month to work out the group’s future relationship.

“I will not close my eyes to reality,” Schaefer added.

Fortum, keen on Uniper’s hydro plants in Sweden and its gas and lignite stations in Russia, has repeatedly said it does not plan a far-reaching restructuring of Uniper.

Fortum is focused on carbon-free power generation, mainly in the Nordic region and Russia, and has been looking for a deal since selling its power distribution grids for 9.3 billion euros in 2014 and 2015.

It confirmed on Tuesday it will not raise its bid which must extend to the whole of Uniper under German takeover rules.

“This might limit some shareholders’ willingness to sell. But Fortum will receive the 47 percent stake (from E.ON), with very high probability, so I don’t see it having a major effect,” Inderes Equity Research analyst Petri Gostowski said.

“Fortum would have majority at the general meeting, so basically they are calling the shots... this is what Uniper’s reluctance is based on.”

A spokeswoman for E.ON confirmed the group still saw Fortum’s offer as highly attractive, adding it would make a final decision about whether to tender its stake to Fortum in January.

If it does not do so by Jan. 11, E.ON faces a compensation fee of up to 1.5 billion euros, which effectively rules out that scenario unless Uniper shares rise significantly from today’s levels, in which case E.ON might reconsider.

($1 = 0.8517 euros)

Additional reporting by Tuomas Forsell in Helsinki; Editing by Maria Sheahan and Keith Weir