The Hindu Business Line : REpower bidding war enters next phase

Chennai May 5 The race to acquire REpower continues, with rivals Suzlon of India and Areva of France locked in a bidding game. "The next round has started off,'' says Dr Michael I. Fischer, a Munich-based partner of Reed Smith Richards Butler LLP (www.reedsmith.com) , an international law firm headquartered in London, updating Business Line about the developments.

"Areva on Thursday decided to maintain its offer for Germany's REpower at 140 per share and does not exclude to increase the offer between Friday's midnight expiry and end of May.''

He explains thus: "According to Section 16 para 2 sentence 1 WpÜG (Wertpapiererwerbs- und Übernahmegesetz, the German Securities Takeover Act), shareholders have two weeks following the closure of an offer and the fulfilment of the publication requirements under Section 23 para 1 WpÜG in which period they can decide whether or not they wish to tender their shares (so-called Wren Rule). This will of course guarantee further suspense until almost the end of May because until then a new offer is possible.''

Suzlon and Areva have made bids of 150 and 140, respectively, for German energy company REpower.

"Observers remain sceptical over the chances of Areva raising its bid, as shareholders who have already tendered their shares to Suzlon will be unable to withdraw,'' notes Dr Fischer.

"As you know on April 10, SE Drive Technik GmbH, an enterprise acting in concert with Suzlon, had agreed to acquire REpower shares at a price of 150 per share. Thereby the offer price under the Suzlon offer had been increased to 150 per REpower share according to Section 31 para 4 WpÜG,'' is a narration, for starters.

"A new leaf has been turned over in the REpower story. The new timeline is May 4,'' Dr Fischer had written, about two weeks ago.

Since the amendment to the offer was published during the last two weeks of the first acceptance period under the Act, the acceptance period was extended by two weeks pursuant to Section 21 para 5 WpÜG and is to expire on May 4.

An `unfolding' deal, therefore, worth watching.

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