Vattenfall Makes EU8.5 Billion Offer for Nuon Unit (Update1)
By Fred Pals
Feb. 23 (Bloomberg) -- Vattenfall AB, Sweden’s largest utility, made an all-cash offer of 8.5 billion euros ($10.9 billion) for 100 percent of Nuon NV’s production and supply unit.
Vattenfall will acquire 49 percent initially and the rest in the coming six years on fixed terms, the Stockholm-based company said today in a statement. The transaction excludes Nuon’s grid operations. After 2008 dividends, the cost will be 10.3 billion euros, the companies said.
“Our partnership will boost Nuon’s investment program for new, cleaner production and innovative energy technologies for our customers,” Nuon Chief Executive Officer Oystein Loseth said in the statement.
Nuon, based in Amsterdam, is the second Dutch utility to sell part of its production and supply business after RWE AG last month agreed to buy Arnhem-based Essent NV for 9.3 billion euros. That deal excludes Essent’s distribution networks and waste- management unit.
The four biggest Dutch utilities are required by law to separate their production, trading and sales units from grid operations by Jan. 1, 2011. The unbundling is aimed at promoting competition and encouraging grid investment.
European utilities have bucked a trend for fewer mergers and acquisitions as changes in European Union law provide incentives for combining. Cost-cutting, diversification and declining stocks have made targets cheaper. The pace of mergers and takeovers fell 39 percent to $2.48 trillion last year as a credit squeeze hampered financing, according to data compiled by Bloomberg.
Expanding into the Dutch energy market has been a top priority for Vattenfall Chief Executive Officer Lars Josefsson since 2005 when the utility bought power plants in Denmark as the company targets northwest Europe for growth.
The U.K., Europe’s third biggest power consumer, is also a priority market for Vattenfall and it bought wind energy assets there in the second half of last year, and plans to participate in the country’s new nuclear program.
Nuon said last year it was looking for a foreign partner to complement its production and supply business. That followed the failure of merger talks with Essent.
Nuon, which has about 10,000 employees, said Feb. 16 that fourth-quarter profit fell 62 percent as production declined and operating expenses increased. Net income fell to 79 million euros from 210 million euros a year earlier. Sales dropped to 1.62 billion euros from 1.78 billion euros.
Editors: Jonas Bergman, Guy Collins
To contact the reporter on this story: Fred Pals in Amsterdam on [email protected]
Last Updated: February 23, 2009 05:24 EST
Le politiche di scorporo delle reti di trasmissione determinate dalle Autority nazionali di garanzia del settore (come nel caso olandese di recente) si confermano nella prospettiva delle agenzie di rating quali fattori di indebolimento del rating delle utility forzate a scorporare le attività di generazione e di fornitura energetica da quelle distributive, sulle quali beneficiano di una rendita di posizione.
Tant'è che l'olandese Nuon, che riceve un'offerta di acquisto da Vattenfall dopo che RWE ha rilevato la concorrente Essent, resta tuttavia in creditwatch negative in attesa soprattutto di verificare con quali modalità e costi l'unbundling verrà effettivamente realizzato.
Pur essendo i bond di Nuon fuori dal monitor, interessanti le notizie sull'andamento dell'attività sul versante del risultato operativo, della capacità di generazione di cassa, dell'indebitamento.
Potrebbe valere la pena di dare un'occhiata ai prezzi...
NUON 'A+/A-1' Ratings Still On Watch Negative On Vattenfall's €8.5 Billion Bid For Its Generation And Supply Operations
LONDON (Standard & Poor's) Feb. 25, 2009--Standard & Poor's Ratings Services said today that its 'A+/A-1' long- and short-term corporate credit ratings on Dutch energy utility N.V. NUON remain on CreditWatch with negative implications following the bid by Sweden-based utility Vattenfall AB (A-/Stable/A-2) for its unregulated generation and supply businesses for an enterprise value of €8.5 billion.
For further details on the bid proposal, please refer to the article
titled "Vattenfall 'A-/A-2' Ratings Affirmed After €8.5 Billion Bid For NUON's
Generation And Supply Businesses; Outlook Stable," published today on
RatingsDirect.
The ratings on NUON were originally placed on CreditWatch on July 18, 2008--alongside those on fellow Dutch utilities Delta N.V. (A-/Watch Neg/--), ENECO Holding N.V. (A/Watch Neg/A-1), and Essent N.V. (A+/Watch Neg/A-1)--to reflect the risks linked to the forced ownership unbundling of regulated distribution operations from unregulated businesses by Dec. 31, 2010, at the latest.
"The ultimate ownership unbundling, whereby NUON's generation and supply businesses will effectively be spun off from its existing corporate structure, is likely to have negative consequences for the company's credit quality, which reflects the company's vertically integrated business model and its currently very strong financial profile," said Standard & Poor's credit analyst Karin Erlander.
The ratings on NUON reflect its strong market position as one of The
Netherlands' major utilities, its robust financial profile, and its stable
distribution operations, which generate about 50% of group cash flows. These strengths are offset by some competition in the fully liberalized Dutch retail market, a relatively challenging electricity consumer profile (which includes a significant proportion of price-sensitive industrial consumers), and risks stemming from the forced unbundling.
NUON's operating performance has been solid over the past few years, and revenues continued to improve through 2008. However, volatile commodity prices and higher operating expenses in the second half of 2008 resulted in reported operating profit declining to €765 million from €1.11 billion in 2007. Funds from operations decreased in 2008 due to lower operating income, and large capital expenditures reduced reported free operating cash flow to €219 million, from €767 million in 2007.
NUON's debt position remains strong, with reported net debt of €642 million in 2008 (net cash position of €293 million in 2007).
We will review the CreditWatch placement in the coming months and will
essentially focus on:
Whether Vattenfall's bid for the unregulated generation and supply operations of NUON is successful.
The financial policy of the regulated businesses. The regulator is considering putting in place minimum credit metrics for the regulated businesses.
We will meet with the regulator to gain a better understanding of how these metrics might affect the financial risk profiles of the regulated businesses.
The allocation of debt between the unregulated and regulated businesses.
The consequences of unbundling for NUON's cross-border lease exposure.
Any one-time costs and/or liabilities resulting from the unbundling.
