The Hindu Business Line : REpower chase turning into greyhound racing

Chennai May 24 "Tonight at midnight, the acceptance period for the Areva offer for shares in REpower will end," alerts an update to Business Line from Dr Michael I. Fischer, a Munich-based partner of Reed Smith Richards Butler LLP (www.reedsmith.com) , an international law firm headquartered in London.

As you may be aware, the Indian wind-energy company Suzlon, and Areva, the French energy major, are in the race for acquiring REpower, the third-largest wind turbine manufacturer in Germany. Both the bidders have been lobbying certain hedge funds to seal a takeover of REpower, according to media reports. There is also speculation that the hedge funds would rather not be willing to sell at the currently offered prices.

Reiterating interest

"Meanwhile, French sources, citing comments made by Mr Philippe Carli, Head of Siemens France, say that listed German industrial group Siemens has reiterated its interest in French state-owned nuclear power specialist Areva," points out Dr Fischer.

Of relevance also is the fact that both Suzlon and Areva have repeatedly stated that they will keep their REpower shares at any rate.

"One way of overcoming the takeover deadlock could be that the two bidders cooperate," suggests Dr Fischer. "What also could happen is the following. Even though both bidders cannot change their offers anymore, there still is a loophole."

What's that? "One of the bidders, e. g. Areva, could acquire further shares for a higher price than the one of its bid resulting in the obligation to pay the same price to the other shareholders. Again, this is a greyhound racing and the one shareholder tendering too early will be the piper."

A track to watch, therefore.