April 12, 2019 / 3:02 PM / in 7 days

Uniper to allow vote to break ownership deadlock

FILE PHOTO: A logo of German energy utility company Uniper SE is pictured in the company's headquarter in Duesseldorf, Germany, March 8, 2018. REUTERS/Thilo Schmuelgen/File Photo

DUESSELDORF, Germany (Reuters) - German utility Uniper has caved in to demands from activist investor Elliott to allow shareholders a vote instructing management to enter negotiations with its largest investor, Fortum.

The company said in a statement on Friday that it has added a vote on a so-called domination agreement - a type of takeover structure used in Germany that allows bidders to tighten their control over a company without holding all the shares - to the agenda for its annual general meeting on May 22.

Uniper is currently in talks with Fortum over how to cooperate in the future, an attempt aimed at repairing their strained relationship after Fortum made a hostile bid in 2017.

Elliott, which holds 18 percent in the German utility, had called for an extraordinary shareholders meeting in March to push for a vote on a domination agreement for the Finnish utility which holds almost half of Uniper’s shares.

“The unclear state of uncertainty between Uniper and Fortum up to now has created an unsatisfactory and intolerable dynamic that is detrimental to the company,” Elliott said.

Maintaining the status quo would risk further jeopardizing the company’s value, it added.

Russian authorities have ruled that Fortum, which is majority-owned by Finland, cannot hold more than half of Uniper because of a strategic water-testing license owned by Russian unit Unipro.

If that license were sold to a third party it could pave the way for a full takeover.

Reporting by Tom Kaeckenhoff; Writing by Thomas Seythal and Caroline Copley; Editing by Mike Harrison

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