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|waldron: UPDATE: GDF Suez: May Withdraw GBP6 Billion Bid For International Power
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Gdf Suez (EU:GSZ)
Intraday Stock Chart
Today : Wednesday 4 April 2012
GDF Suez SA (GSZ.FR) Wednesday said it could withdraw its GBP6 billion bid for International Power PLC (IPR.LN) after the U.K.-based company said it was rejecting the French utility's indicative offer for the remaining 30% of the company it doesn't already own.
International Power said the 390 pence bid "undervalues" the company. Under the GDF Suez bid, all of International Power would be valued at around GBP19.9 billion, while the current share price values the company at around GBP20.6 billion.
GDF Suez said the offer was still "attractive" and it was considering different options regarding International Power, including withdrawing the offer.
Earlier, International Power said in a statement that the members of the independent committee have unanimously concluded that the 390 pence per share offer "undervalues" the company.
"Accordingly GDF Suez has been notified that the independent committee is unable to accept the indicative proposal," the statement added.
Under the terms of the agreement between GDF Suez and International Power, the French utility is restricted from making a takeover offer for all, or any, of the outstanding International Power ordinary shares for the period until Aug. 3 or earlier with the consent of all of the independent non-executive directors, the statement said.
Earlier this week, shareholder Neptune Investment management said GDF should raise its bid. Robin Geffen, who runs Neptune, told Dow Jones Newswires that the bid should begin with a four, rather than a three, in line with the company's shares, which are trading above GBP4.
At 0705 GMT, International Power shares were up 0.4 pence at 403.4 pence, while GDF was down 0.7% at EUR18.91.
-By Selina Williams, Dow Jones Newswires +44 207 842 9262; firstname.lastname@example.org|
|waldron: Statement re dividend
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RNS Number : 6590A
GDF Suez SA
02 April 2012
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION
THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE
The Board of Directors of GDF SUEZ met on Monday 2 April 2012 under the chairmanship of Gerard Mestrallet and unanimously confirmed its support to the possible offer of 390 pence per share for the remaining International Power shares not already held by GDF SUEZ.
The Board of Directors decided to offer to the shareholders the possibility to receive the final dividend for 2011 (EUR0.67) in GDF SUEZ shares.
The conditions for setting the value of the dividend in shares will include a 10% discount to the average share price over the twenty trading days immediately preceding the Annual General Meeting.
To enable the implementation of this option, the payment of the final dividend for 2011 is postponed from 30 April to 24 May 2012, the ex-date remaining on 25 April 2012 as originally announced.
The Board decided to offer the same option, for any interim dividend for the fiscal year 2012 that may be decided by the Board of Directors, subject to the success of the potential offer for the remaining shares of International Power it does not own.
In this context, the French State and Groupe Bruxelles Lambert (GBL) expressed to GDF SUEZ their intention to take up the option of receiving GDF SUEZ shares in respect of their share of the dividends.
This resolution is intended to supplement the financing of the proposed offer for the remaining International Power shares not already held by GDF SUEZ in complement to the upwards revision of the disposal plans previously announced.|
|waldron: GDF Suez Makes Non-binding Offer For Rest Of International Power
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Gdf Suez (EU:GSZ)
Intraday Stock Chart
Today : Thursday 29 March 2012
French power operator GDF Suez SA (GSZ.FR) Thursday confirmed that it made a non-binding indicative proposal to buy the shares in U.K.-based International Power PLC (IPR.LN) it doesn't own yet at 390 pence each, insisting such a transaction would provide "significant benefits to both businesses."
The group "strongly believes that the indicative proposal offers attractive terms to International Power shareholders" and that a merger would simplify GDF Suez's structure and improve the further integration between the businesses.
The move is supported by the two largest shareholders of GDF Suez, the French state, which owns 36%, and the Belgian investor Albert Frere's holding Groupe Albert Frere, which owns 5.2%.
Earlier Thursday, International Power said that it had received such a proposal.
GDF Suez is now required, by no later than 1600 GMT on April 26, to either announce a firm intention to make an offer for International Power or announce that it doesn't intend to make an offer.
The news sent the group's share price down--at 1141 GMT, share in GDF Suez were trading down 1.8% to EUR19.09 while the CAC-40 benchmark index was down 1%.
Would the transaction proposed be completed, GDF Suez would remain committed to maintain its A credit rating and would also consider increasing its asset disposal plan, it said.
The group has planned to dispose of EUR10 billion worth of assets between 2011 and 2013. Earlier this year it said that in 2011, it sold two thirds of the assets sales that were planned over the period.
In February last year, GDF Suez finalized the combination of its international operations outside of Europe and some assets in the U.K. and Turkey with International Power, creating the world's largest private power generation group.
- By Geraldine Amiel, Dow Jones Newswires; +33 1 40171767; email@example.com|
|jacks13: From what I can recall the initial approach from GDF in January 2010 involved a cobbling together of IPR's then assets with some of GDF's assets in exchange for GDF Suez acquiring a majority stake in the enlarged group.
GDF had lots of cash but were unwilling to stump that up at the time. They were presumably very risk averse and the bid was complicated by some political considerations, the French state owning about a third of the shares of GDF Suez. The offer was very opaque, to us on the outside at least, and it failed because agreement presumably couldn't be reached on the respective valuations of the IPR and GDF Suez assets that were to be pooled. It was a cashless/shareless offer and was probably opportunistic on the part of GDF Suez.
Anyway they came back as we now know with a cash sweetener of 92p/sh and IPR shareholders did get to keep their diluted shareholdings in the enlarged group. A takeout price in the region of 450p was being mooted by analysts at the time on the basis of a conventional 100% cash offer, so all else being equal (which they're not) the current take-out share price would be 360p.
I'm not saying that that is a sensible way to value the new company but it might be a ruse deployed by GDF Suez advisers in any potential offer for the minority shares, after all no one else will be joining in the bidding.
There was chatter amongst analysts during the 2010 merger that GDF Suez would be back within two to three years and as I understand it the two year anniversary is triggered on 17 July 2012, that being the end of the two year closed period.
There is bound to be speculation, verbal and financial, in the coming months but as it is not in the interests of the majority holder to see the share price bid up I don't expect either GDF Suez or the management of IPR to be putting any fuel on the fire.|
|optomistic: wipo,Presentation on website paints a better picture than the share price action, as to buying now, I'm well invested in IPR or perhaps I may have been tempted this morning.
|shauney2: From Barclays
Todays focus: International Power Reiterate Accumulate
We recently upgraded our recommendation on the Utilities sector, in the light of stronger power prices, sustained yields, and political risk better reflected in valuations.
In the UK, our favourite name remains International Power. After a strong run last year, the shares paused for breath over the past couple of months. But we believe the upcoming Interim Management Statement tomorrow will refocus investors on the group's ongoing projects and superior growth prospects. The company targets to add to its existing 66,000MW fleet another 22,000MW by 2013, while maintaining a good balance in terms of fuel (gas, oil, coal, renewable). Financing should also be easier post combination with GDF Suez, with the group's credit rating now lifted to investment grade.
A well diversified presence in the UK, America, Middle East and Australia should give the group the opportunity to benefit from the recovery of global power prices. The part of the output sold via contracts should limit downside risk.
With the new entity, management is forecasting financing synergies of £61million, and operating synergies of around £104 million, which should support earnings growth rates towards the top end of the European utility sector. As project execution unfolds and synergies are realised, we see further upside to the current IPR share price, and our fair value for the stock is 400p.|
|jacks13: luminoso - 1012
You could be right.
With GDF holding 70% of the new company they will have the deciding vote for or against all proposals regarding dividends, board appointments etc. They will have a very firm grip on the company's prospects and performance.
GDF will have a simple task of acquiring the remaining 30% of the shares in the enlarged company without materially affecting the prevailing share price.
The quiet off-market accumulational of 15% or so of the shares at a modest premium to the prevailing market price will be enough to allow them to de-list the company and the remaining shareholders will have either to choose to stick with the 'private' company or take what they're offered. If GDF get to a holding of 90% they can force remaining shareholders to sell anyway. With GDF's impregnable grip on the company no counter-bid can be tabled.
Given this situation I don't see the market getting too excited about the company's prospects so in my view there won't be huge share price growth regardless of performance.
GDF can ensure that dividend policy is kept conservative (I don't expect any improvement on the current 40% payout ratio), so that any improvement in earnings will serve to strengthen 'their' balance sheet.
In the absence of share price growth the only attraction of the share will be for income funds and those private investors who want the bond-like characteristics that it will offer.
Risk of capital loss should be small, likewise though capital appreciation will also be modest. The share should yield 4% or 5% over the next couple of years and there should be a modest take-out premium of 10% or 15% in due course.
Those are my thoughts and they may prove wide of the mark but with them in mind I've yet to decide whether to stay in, get out or reinvest the special dividend.
If the share price were to get anywhere near 500p cum-dividend I'd sell, but your figure of 450p is probably more realistic and at that level I'm prepared to await developments.|
|shauney2: From Barclays Wealth.
International Power- Reverse takeover: better terms than expected
Event: Following last month's announcement that discussions were taking place, International Power (IPR) and GDF Suez announced they have entered into a Memorandum of Understanding to combine IPR with the International assets of GDF Suez. This is effectively a reverse takeover of IPR, whereby IPR shareholders will receive a special dividend from GDF of 92p in cash and GDF Suez international assets will be transferred to IPR, along with some debt. Shareholders on IPR's register just prior to close (expected at the end of this year/ beginning of next) will be eligible to receive the dividend. Ownership of the new entity will be split 70/30 for GDF/IPR and the combined group will continue to be listed. The companies expect £165 million of synergies per year 5% of the combined EBITDA, of which 75% should be achieved from year 2. The CEO of the combined group will be IPR's CEO Philip Cox, the chairman Dirk Beeussart, vice-president in charge of GDF's international arm. The dividend policy will be same as IPR's, i.e. a 40% payout. IPR s board will be recommending the deal, which will be submitted to a shareholders vote.
BW View: The terms are generally better than market expectations: the 92p dividend, which is effectively the control premium, implies a 25% yield and is at the top end of expectations. The synergies also seem to be higher and to come through faster than what most brokers had although there is still very little detail at this stage. There was no surprise in terms of management. We think this deal makes a lot of sense from a strategic point of view. The two sets of assets show a good geographic overlap, with a good balance in terms of fuel mix and solid growth pipeline. Also IPR would get access to a better balance sheet and lower cost of debt and GDF Suez should benefit from a better visibility on the value of its international portfolio. We do not expect any counterbid and IPR's main shareholder Invesco has already said they are supporting the deal. There are still few details provided but first "back of the envelope" calculations would suggest a price for the new IPR of around 400p (including the special dividend). As the shares had already rallied over the past few weeks, this is only 9% above yesterday's closing share price, hence some profit taking this morning. A conference call is taking place this morning. We will be reviewing our recommendation after we get more data.|
|sailing john: In very simple terms and assuming GDF take just 50.1% of the enlarged group IPR has net assets of £4.8bn share price 320p
GDF Suez add net assets of £6.2bn in return for 50.1%
Enlarged IPR has net assets of 11bn but circa twice as many shares
The new share price then roughly 11/4.8*320/2 = 367p
There is further added value then from the synergy of combining two very similar businesses, and the massive increase in fire-power to fund future growth which could add another 50p to the share price over time
Hence the deal value of around 420p quoted in the press
Obviously the deal will involve different percentage shareholdings and different asset values but this is just to demonstrate what is happening.
Hope this helps
|po0h bear: this is going to be a very interesting week. the oil price continued lower on friday to around $63. many are expecting the fall to be temporary and price to bounce to $70 (see sunday telegraph). but who knows, perhaps it will go lower. didnt lord browne forecast $40?
i have done a comparison of the oil price with the IPR share price over past 4 years and the correlation is very strong. if the oil price remains at $63 and the relationship continues then that suggests an IPR share price of around 250p.
good luck longs, you need it ;)|
Intl Power share price data is direct from the London Stock Exchange