FRANKFURT/MADRID (Reuters) - Spanish renewable energy producer Acciona (ANA.MC) has increased its bet on the wind turbine industry, launching a bid for Nordex (NDXG.DE) that values the German turbine maker at more than 1 billion euros ($1.2 billion).
Acciona already owns a stake in Nordex, but on Monday agreed to take part in a 99 million euro capital increase by the German company that will take Acciona’s stake to 36.27% - above the 30% level that triggers a mandatory takeover bid under German law.
Nordex, which competes with Siemens Gamesa (SGREN.MC) and Vestas (VWS.CO), has seen strong demand for its Delta 4000 series of wind turbines and at the end of the first half of 2019 had an order backlog of more than 7 billion euros.
However, profitability in the industry has been hit as it shifts from a system of government subsidies to competitive tenders where low costs and scale are increasingly important.
Acciona said it would offer 10.32 euros per Nordex share, valuing the German company at 1.1 billion euros after the capital increase, according to Reuters calculations based on data from Refinitiv.
That’s a premium of just 1.8% to Monday’s closing price for Nordex shares, leading some traders to speculate Acciona might have to increase its offer to win over Nordex shareholders.
At 1045 GMT, Nordex shares were up 9.2% at 11.07 euros, helped by the boost to the company’s finances from the capital increase.
Acciona said it had decided to increase its investment in Nordex “in view of the company’s solid growth prospects, with the goal of strengthening its balance sheet in a challenging market environment.”
The deal would be broadly neutral to Acciona’s earnings in 2020 and boost them in 2021, it added.
“Strategically, we think this operation is positive for the stock (Acciona) as it strengthens its presence in the renewable sector, but in the short term we see it as potentially negative as it will imply increasing the company’s net debt by c.15% and will not have a positive impact on earning until 2021,” CM Capital Markets said in a research note.
Spanish investment firm Alantra questioned the logic of the deal. “Our view is that Acciona might be buying time for Nordex to survive and then look for M&A alternatives for this asset,” it wrote in a note.
Acciona shares were down 4.25% to 92.55 euros at 1045 GMT.
The takeover bid would represent an investment of around 700 million euros after capital increase for the 63.73% of Nordex that Acciona wouldn’t own, based on a 100% acceptance level.
In a conference call, Acciona declined to comment on whether it would increase its offer to Nordex shareholders.
A spokesman for the Quandt family, which owns 5.71% of Nordex, told Reuters it would remain invested.
Writing by Ashifa Kassam; additional reporting by Jesús Aguado in Madrid and Arno Schuetze; Editing by Jesús Aguado and Mark Potter