Innogy Debut Given Warm Reception by Investors
October 07 2016 - 4:14AM
Dow Jones News
By Monica Houston-Waesch
FRANKFURT--Shares of Innogy, the renewable energy, grid and
retail arm of German utility RWE AG, started trade Friday at 37.30
euros ($41.6), above the offer price of EUR36.00 a share set late
Thursday.
The offer price was at the top end of a book-building range
between EUR32 and EUR36, and values Innogy at around EUR20 billion.
The offer was supported by a firm order from Blackrock Inc. for
shares worth EUR940 million for the funds that it manages.
Innogy's good reception was bolstered by strong demand among
institutional investors. The float of around 25% of Innogy shares
generated gross proceeds of around EUR5 billion.
European utilities have been hit by eroding profits because of
low wholesale prices spawned by an electricity glut. In Germany,
uncertainty surrounding liabilities connected to the country's exit
from nuclear power has also weighed on operators.
Both RWE and E.ON SE responded to the challenges by splitting
conventional generation from renewable power in a bid to attract
investors to shore up sagging stock prices. While RWE floated its
renewable energy operations, last month E.ON hived off its
conventional energy activities into a new company, Uniper SE.
Uniper's debut was rockier, coming with a EUR3.8 billion impairment
charge and a pledge to divest at least EUR2 billion to pare
debt.
At 0725 GMT, Innogy shares are trading at EUR37, while RWE
shares are down 3.2% at EUR14.12.
Write to Nikki.Houston at nikki.houston@wsj.com
(END) Dow Jones Newswires
October 07, 2016 03:59 ET (07:59 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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