Areva SA, the world’s biggest maker of nuclear reactors, bid almost 600 million euros ($778 million) to buy wind-turbine supplier Repower Systems AG as the French company taps demand for cleaner energy sources than fossil fuels.
The cash bid of 105 euros a share for the 70.01 percent Areva doesn’t already own in Repower is 17 percent higher than the Hamburg-based company’s close on Jan. 19, the French company said today. Separately, Repower said it’s considering the offer and its share price rose above the bid amount.
Areva, based in Paris, became an investor in Repower in 2005 and its offer for the remainder is timed with a global surge in wind-power projects as governments seek cheaper sources of renewable energy to cut their dependence on oil and gas. Chief Executive Officer Anne Lauvergeon’s purchase will add a business with 740 employees and sales of about 450 million euros.
“Wind power is a good business and is very high visibility as it’s based on long-term contracts,” said Ian Macleod, an analyst at Jefferies International in Paris. “Areva is paying what looks like quite a fulsome price and this conveys a relatively bold Lauvergeon.”
Shares of Areva rose as much as 13.5 euros, or 2.3 percent, to 600 euros and traded at 599.5 euros as of 11:25 a.m. in Paris. Those of Repower surged as much as 27 percent to 114.11 euros and they last changed hands at 108.20 euros in Frankfurt.
Macleod has a “buy” recommendation on Areva and doesn’t cover Repower.
The French company plans to use its network of utility customers to drive sales of Repower’s wind turbines. The German business has operations in France and elsewhere in Europe and is planning to expand in China, India and North America. The U.S. added a record 2,431 megawatts of wind energy generating capacity in 2005, the most of any country worldwide, according to the Global Wind Energy Council.
“We have found in Repower the right company to participate in the promising wind-energy market,” Lauvergeon said. “Through its financial strength and global presence, Areva will enable Repower to accelerate its development.”
Increasing demand enabled Repower, Germany’s third-largest maker of wind-power equipment behind Enercon and Vestas Wind Systems A/S, to post nine-month profit of 1 million euros compared with a year-earlier loss of 8.3 million euros. Sales in the period were 50 percent higher at 292.6 million euros.
Contact with Martifer
Areva’s offer depends on it gaining a stake of more than 50 percent. Lauvergeon said on a conference call that she’s “confident” of achieving that.
Areva said it’s been in contact with Martifer Construcoes Metalomecanicas of Portugal over that company’s shareholding in Repower. Martifer, a unit of Mota-Engil SGPS SA, Portugal’s biggest construction company, has a 25 percent stake in Repower, according to Bloomberg data.
Lauvergeon declined to comment on why Repower’s shares are trading above the offer price, describing the French company’s offer as “fully reflecting” the German company’s value and prospects.
To contact the reporter on this story: Brian McGee in London at email@example.com
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