February 23, 2018 / 5:06 PM / 6 months ago

Innogy denies report that board will discuss M&A options

FRANKFURT/MADRID (Reuters) - German energy group Innogy (IGY.DE) on Friday denied a media report saying that its supervisory board would discuss a possible sale to rivals Iberdrola (IBE.MC) or Enel (ENEI.MI) at its next meeting in March.

FILE PHOTO: Innogy logo in Essen, Germany, March 14, 2017. Reuters/Thilo Schmuelgen/File Photo

German magazine Der Spiegel said the board would discuss these scenarios as well as other options, including a continuation of the expansion strategy of former Chief Executive Peter Terium, who left the group in December after a profit warning.

“Contrary to the claims made by Spiegel, there will be no discussion whatsoever about any scenarios with regard to a sale of the company at the supervisory board meeting of Innogy on March 6,” the company said in an emailed statement.

Sources previously told Reuters that Engie (ENGIE.PA) and Enel had held talks with Innogy, which has a market value of 17.4 billion euros ($21.4 billion), and that Iberdrola was sounding out M&A options in Europe.

Spiegel said Innogy’s supervisory board could decide to sell parts of the businesses that were bought under Terium’s leadership and agree a savings program for the remaining group, in which RWE (RWEG.DE) owns a 76.8 percent stake.

Innogy last month said it was examining potential cost cuts across its business after Terium left in a dispute over the company’s strategy, adding that it would provide further details along with annual results on March 12.

“The supervisory board has highlighted the need for a bigger focus on cost discipline and a focused growth and investment strategy. Those are the issues that will be discussed at the supervisory board’s upcoming meeting,” Innogy said.

Iberdrola declined to comment. Its chairman this week ruled out big deals over the next five years unless there was a good target without the need for cash or a capital increase.

Enel Chief Executive Francesco Starace in November said it was not interested in doing large M&A deals and was also not interested in Innogy.

A spokeswoman for RWE confirmed previous comments saying that it, too, called for greater cost discipline at Innogy while welcoming, in general, the group’s strategy. She declined to comment on M&A speculation raised in the Spiegel article.

RWE Chief Executive Rolf Martin Schmitz has said that the company was considering all options with regard to its Innogy stake. The group has repeatedly said that is under no pressure to sell.

Reporting by Christoph Steitz and Jose Elias Rodriguez; Editing by Douglas Busvine and David Goodman

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