French utility GDF Suez SA (GDFZY.PK,GDSZF.PK) on Monday said its wholly-owned subsidiary Electrabel S.A. has agreed to buy from International Power Plc (IPR: Quote, IPR.L, IPRPY.PK) the remaining 30 percent stake that it does not already own in the British utility for a sweetened offer of 418 pence per share in cash.
It was in February 2011 that the combination of International Power and GDF Suez's Energy International Business Areas outside Europe as well as certain assets in the UK and Turkey occurred.
The combined business led to an independent power generation company with over 66,000 MW of gross capacity in operation and committed projects expected to deliver 22,000 MW of gross capacity by 2013. It had strong positions in major regional markets and an attractive growth profile.
Early this month, GDF Suez made an indicative offer of 390 pence per share cash for the remaining stake, but IPR rejected the offer as grossly undervaluing the company.
The revised offer represents a premium of around 20.8 per cent to the closing price of IPR shares of 345.9 pence on February 29, which was the last business day before speculation intensified that GDF SUEZ would make an offer for IPR.
In addition to the sweetened offer, IPR shareholders will retain the right to receive the final dividend of 6.6 euro cents per IPR share for the year ended December 31, 2011.
The offer values the entire issued and to be issued share capital of IPR at around 22.8 billion pounds, assuming full conversion of IPR's convertible bonds and exercise of share options.
Electrabel currently holds a 70 per cent interest in IPR and is an existing member of the GDF Suez Group. The offer will be funded by GDF Suez's existing bank facilities and cash resources.
The offer is to be effected by means of a court-sanctioned scheme of arrangement. The scheme needs the approval of IPR shareholders representing at least 75 per cent voting at the court meeting in value of the IPR shares voted. Electrabel will not be entitled to vote its IPR shares at this meeting.
Additionally, a special resolution implementing the scheme and approving the related capital reduction needs to be passed by IPR shareholders representing at least 75 per cent of votes cast at the general meeting.
The independent IPR directors will unanimously recommend that IPR shareholders vote in favor of the scheme.
Commenting on the Offer, Gérard Mestrallet, Chairman and CEO of GDF Suez, said, "The acquisition of the minority stake in International Power, based on strict financial discipline, constitutes a major step in the development of the Group. It will allow the Group to fully capture growth in fast growing markets."
The offer is accretive on earnings for shareholders and also establishes a basis for long term and solid growth, Mestrallet added.
IPR shares are currently trading higher by 13.80 pence or 3.42 percent at 417.70 pence on a volume of over 30 million shares in London. GDF shares are up 1.17 percent at 18.17 euros in Paris.
by RTT Staff Writer
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