Morgan Stanley takeover bid 'significantly undervalues' PNE

PNE shareholder Enkraft Capital criticised Morgan Stanley Infrastructure Partners' (MSIP's) proposed takeover of the German developer.

Morgan Stanley and PNE confirmed discussions of a possible takeover at the end of August
Morgan Stanley and PNE confirmed discussions of a possible takeover at the end of August

Enkraft, which holds more than 2.9% of share capital in PNE, said the management board’s support for the takeover offer was baffling.

MSIP announced an increased offer of €4/share to takeover the German developer in early October, up from the €3.50-3.80/share range initially suggested.

This offer is also 31% higher than the last closing share price of €3.05 before PNE confirmed talks with the banking giant on 27 August.

But in a letter to PNE's board seen by Windpower Monthly, Enkraft argued calculations of PNE’s value range between €5.50 and €5.70/share — based on expected earnings from PNE’s project pipeline and forecast Ebit for 2019-2021. 

The asset management firm claims to be one of PNE’s ten largest shareholders.

It added that with a "moderate takeover premium of 25%", a fair offer would be €6.90-7.10/share — up to 44% more than the €4/share offered by MSIP.

It also argued the PNE board vowing to accept the takeover with a minimum acceptance ratio of 50% "creates a situation in which existing shareholders will have to accept a considerable devaluation of their stake in the company if they don’t accept the takeover bid".

Enkraft said the PNE management board’s support for the takeover bid is "in no way comprehensible".

When PNE announced that it had concluded the investor agreement with MSIP — and its support for the takeover bid — on 10 October, its CEO Markus Lesser claimed the €4/share offer would provide an "attractive premium" for company shareholders.

A PNE spokesman told Windpower Monthly the developer is obliged to publish a statement regarding the takeover offer under German law, and will do so by by 14 October. He added: "We have taken notice of (Enkraft's) letter, and will not comment further."

MSIP subsidiary Photon Management is handling the takeover. It has entered into a purchase agreement to acquire 11% of PNE’s total share capital from the developer’s largest investor group, thereby securing the stake required for a takeover bid.

Under German law, any shareholder that acquires a controlling stake of at least 30% must launch a public offer for the outstanding shares.

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