The Hindu Business Line : Suzlon Energy raises bid for REpower

Mumbai April 10 Suzlon Energy Ltd on Tuesday raised its bid price for acquiring REpower Systems AG, the German wind turbine producer, to 150 per share from 126 per share.

The new offer, which is 7.1 per cent higher than the rival bid made by the French company Areva SA on March 15, puts the value of REpower to 1.22 billion. Areva had offered a price of 140 last month.

According to Suzlon, SE Drive Technik GmbH, which is acting in concert with Suzlon in its bid to acquire the German company, has purchased 6.27 lakh shares of REpower (7.7 per cent) at a price of 150 per share. As a result of this, the offer price has automatically been increased to 150, as per the German takeover regulations.

Suzlon through a special purpose vehicle — Suzlon Wind Energie GmbH — already holds 25.4 per cent stake in REpower. With the last week's purchase of 7.7 per cent stake, Suzlon's stake has gone up to 33.1 per cent.

Interestingly, Areva also holds 29.9 per cent stake in REpower.

A Suzlon official said the current offer expires on April 20 but if Areva puts up a counter bid, then the deadline could be extended by another two weeks.

Mr Tulsi Tanti, Chairman & Managing Director, Suzlon, in a press release said, "The decision to increase the offer was taken after careful analysis and review of potential synergies which Suzlon can contribute to REpower, given our fully integrated business and control over component level technology and its integration with turbine technology."

Mr Vivek Kher, spokesperson for Suzlon, said the takeover of REpower will not hurt Suzlon's earnings in the current fiscal. "If we control 100 per cent of REpower our debt to equity ratio will remain 1:1.45 by March 31, 2008. In the event of Areva not selling its share and Suzlon controlling 70 per cent of REpower, the debt to equity ratio would be 1:1.2. For controlling 70 per cent of the REpower, Suzlon would have to borrow 626 million," he said.

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