Upping the ante again and again -- Bidding war for Repower

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French nuclear giant Areva and India's Suzlon Windenergie are continuing to trade blows in their battle to take control of German wind turbine maker Repower Systems. After Areva upped its offer for the small German wind turbine manufacturer to EUR 140/share to trump Suzlon's EUR 126/share bid (Windpower Monthly, April 2007), the Indian firm hit back on April 10, increasing its offer by another EUR 10 to, EUR 150/share. The Suzlon offer and a capital increase secured by Repower last month now values the relatively small player in the wind turbine history at EUR 1.34 billion.

The increased offer was made through Suzlon's acquisition of 7.7% of Repower shares at EUR 150/share, a purchase made on behalf of Suzlon Windenergie by German company SE Drive Technik. Under Germany's takeover law, any purchase of shares subsequent to a takeover offer automatically raises the offer to the rate paid for the shares. With the offer not conditional on gaining a minimum level of acceptance by shareholders, in contrast to Areva's pledge only to proceed on the basis of acceptance of its offer by more than 50% of shareholders, Repower's boards backed the Suzlon offer.

Seven days later -- and three days before an April 20 deadline for further bids closed -- Areva waived its minimum acceptance condition. While maintaining its EUR 140/share bid price, the revised conditions of Areva's bid means "the transaction safety and comparability of both offers will be increased for the shareholders," says Repower. The Suzlon bid has been supported all along by large Portuguese construction company Martifer, which already owns 25.4% of Repower.

Repower says that both nuclear Areva and Suzlon/Martifer would be "an appropriate strategic partner for accelerated growth in the international wind energy industry." Shareholders have been given an extended deadline to May 4 to decide which one they prefer.

While no further formal offer increases are allowed under Germany's takeover law, Repower points out that the bidding may not be over yet. Areva, it says, could still effectively up its bid via the share purchase route Suzlon used. The French firm already holds a 30% stake in Repower. The extended deadline at least gives Areva, a state owned company, time to discuss its options with the French government, currently preoccupied with the presidential elections.

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