Fortum Fails to Gain Uniper Majority Stake
Finnish utility Fortum has failed to secure majority control of German gas and power supplier Uniper, leaving management at both firms facing up to an uneasy truce.
After an additional tender for Uniper shares that closed February 2, Fortum said February 7 it managed to amass only a few shares on top of the 46.93% previously secured, taking its total holding to 47.12% of the share capital and the voting rights of Uniper.
Fortum CEO Pekka Lundmark put on a brave face: “We are satisfied with the shareholding we have received which will, when the transaction is finalised, make Fortum the largest shareholder in Uniper.”
He added: “We are confident that co-operation between Fortum and Uniper can create significant value for shareholders and stakeholders of both companies. Our priority now is to establish the foundation for such co-operation through talks with Uniper.” Fortum noted that the offer is still subject to competition and regulatory approvals, but that Fortum expects to finalise its transaction in mid-2018.
Germany’s E.ON, which made a huge loss in 2016 and is selling non-core interests to reduce debt, on January 8 2018 agreed to sell its entire 46.65% of Uniper share capital to Fortum for €3.76bn. Uniper voiced its opposition to the move throughout the process. Now the result means that Uniper's one main shareholder E.ON will now be replaced by another, Fortum, which Uniper has publicly criticised – an unsatisfactory situation for both players.
After Fortum’s announcement February 7, Uniper CEO Klaus Schafer remarked: “We are strengthened by the trust placed in us by our shareholders, who overwhelmingly followed our recommendation and did not accept the takeover offer. This shows us that the capital market continues to believe in our strategy and our long-term competitiveness as an independent company... Now it’s important to reach an agreement with Fortum as prospective major shareholder, in order to stand up for our employees’ legitimate interests, as well as to secure our strategic and financial independence. We have already taken the first small steps in this direction. But there is still a long way to go.”
Uniper’s share price rose in 2018 to well above Fortum’s roughly €22/share offer, peaking according to Schafer at €26.64. At 11.30am local time (10.30am GMT) on February 7 it was about €23.29.
Uniper regroups the former Ruhrgas business in Germany, plus fossil-fuel-powered generation and trading interests in Europe, Russia and Brazil plus a Swedish nuclear business all of which were spun off from E.ON.