UPDATE 2-E.ON $4 bln impairment puts focus on strategy
* Adjusts outlook, to book 3 bln euro impairment charge
* Move raises questions about M&A strategy
* Shares down 1.0 percent
(Adds detail, background)
FRANKFURT, Dec 13 (Reuters) - E.ON (EONGn.DE) was one of the biggest fallers on Germany's blue-chip stock index on Tuesday morning after a 3 billion euro ($4 billion) impairment charge raised more questions about how the utility will adjust to limited growth in its home market.
Germany's decision to abandon nuclear power threw E.ON into crisis earlier this year, forcing it to cut its dividend, 11,000 jobs, and its outlook. [nLDE7780PG]
E.ON, whose shares were down 1.0 percent at 1020 GMT, cut the upper end of its 2011 operating profit target range due to the outlook for long-term power prices in Italy and Spain after the market closed on Monday. [nL6E7NC46I]
While most brokerages -- including JP Morgan and Morgan Stanley -- said the impairment's impact would be short term, WestLB's Peter Wirtz said the move fuelled concerns about E.ON's future strategy.
"The company's poor track record in terms of acquisitions puts the company's new ambitions to look for growth overseas ... back on the radar screen of investors," Wirtz said, downgrading the stock to "neutral" from "add".
Sources had told Reuters on Friday that E.ON had submitted a binding offer for Portugal's 21.35-percent stake in national power provider EDP (EDP.LS), a move that would allow it to tap new growth markets and expand its reach. [nL5E7N945A]
According to a report, the company put in the lowest offer of the four bidders still in the process. [nL6E7NC0UN]
As part of its restructuring, E.ON plans to divest 15 billion euros of assets by end-2013, of which more than 9 billion has been realised.
German newspaper Sueddeutsche Zeitung reported German insurer Allianz (ALVG.DE) was in talks to buy the gas transportation network of E.ON unit Ruhrgas, a deal that could be worth 2.0-2.5 billion euros. [nL6E7ND0FJ]
($1 = 0.7567 euro)
(Editing by Dan Lalor)
((firstname.lastname@example.org)(+49 69 7565 1269)(Reuters Messaging: email@example.com)) Keywords: E.ON/
(C) Reuters 2011 All rights reserved. Republication or redistribution of Reuters content, including by caching, framing, or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
- Tweet this
- Share this
- Digg this
- Ten countries scour sea for Malaysia jet lost in 'unprecedented mystery' |
- Exclusive: Malaysia plane probe narrows on mid-air disintegration - source
- Merkel raps Putin as Russian forces tighten grip on Crimea |
- Missing Malaysian jet may have disintegrated in mid-air - source |
- CORRECTED-UPDATE 4-Malaysia Airlines plane crashes in South China Sea with 239 people aboard - report