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    Uniper: Asian Owner 'a More Logical Choice'

Summary

German energy firm Uniper December 7 continued to criticise Fortum’s takeover bid, saying it was the wrong partner for its trading strategy, and declining to rule out a possible blocking strategy.

by: Mark Smedley, Dalga Khatinoglu

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Natural Gas News, Asia/Pacific, Europe, Carbon, Corporate, Mergers & Acquisitions, Financials, News By Country, Finland, Germany

Uniper: Asian Owner 'a More Logical Choice'

German energy firm Uniper December 7 continued to criticise Fortum’s €8.05bn ($9.5bn) takeover bid, saying an Asian partner would make more sense for its trading strategy, and declining to rule out a possible blocking strategy.

Asked in a conference call with analysts why Uniper was so opposed to working with Fortum in trading, CEO Klaus Schafer said that Uniper is active as a trader of both LNG and coal: “LNG is the glue that links both the Asian and US markets with Europe. In coal too, Pacific and Atlantic basins are moving together.” Despite Fortum's "lack of trading experience", he admitted that perhaps Fortum might not automatically curb Uniper’s trading.

However, he said, if we wanted a partner to expand into Asia, it would be odd to pick a Finnish partner. "Had we wanted a partner, I guess I would have chosen an Asian partner,” said Schafer in response to a question why Uniper is so adamantly opposed to a Fortum takeover.

Schafer and CFO Christopher Delbruck ruled out a deeply discounted capital increase as an attempt to block the Fortum offer, as it would run counter to Uniper shareholders’ interests.

Schafer though said that: “Relating to a capital increase, but not deeply discounted, there I can only comment generally, it’s always the board’s interest to act in the best interest of stakeholders, and thus we cannot specifically rule out any measure – including the one you were talking about.” Uniper noted that an aggressively high special dividend would be blocked by E.ON, which still owns 46.65% of Uniper.

Uniper confirmed December 7 that it plans to raise its dividend by 25% in 2018, and by an average of 25% per year through 2020 if it stays independent.

Another analyst asked if Uniper would rule out a higher offer price, if offered by Fortum. The response was that Uniper would consider any offer, but that it could not speculate on the hypothetical: “We’ve come to a conclusion based on this offer.” In any case Fortum CEO Pekka Lundmark said of its November 7 offer, valuing 100% of Uniper at €8.05bn, that it was a "final offer".

But it emerged this week that US investor Elliott Management has bought a 5.32% stake in Uniper. Although it has not revealed its hand, the US fund may be hoping for a bidding war for Uniper.