Enel Investment Holding B.V., Italian Enel's subsidiary made a buyout offer to WGC-5 shareholders art Rub 4.4275 ($0.18) per share, Interfax reported quoting Enel's press release. Enel, which currently owns a 37.15% stake in WGC-5, is poised to acquire the remaining 62.85% in the charter capital. The offer will be valid for 80 days after WGC-5 receives it.
WGC-5's current market price is Rub 4.24 ($017) per share, which is 4% less than the buyout offer price. Market participants were moderately upbeat on this development and the utility climbed 0.98% amid a downturn on the market. News that Enel will most likely buy out shares at Rub 4.4275 ($0.18) as reported back in late October. According to the company, this was the highest price offered by Enel over the last six months. According to Finam estimates, the weightage average market price for the last six months is Rub 3.95 ($0.157) and Enel's offer price will therefore be 11% higher than this figure.
After WGC-5 was unbundled from UES, the Russian government's stake in the utility dropped to 26.4%, with the remaining 25% distributed among minority shareholders. According to Finam estimates, Gazprom holds 5.25%, SUEK 0.5% and NorNickel 1.7%. Altogether, these equity positions nearly correspond to the stake which Enel earlier acquired from Credit Suisse. The government will likely accept the offer and Enel could allocate $1.7 bln to buy out its stake at Rub 4.4275 ($0.18) per share. Some large portfolio shareholders, such as Dart fund, could also opt to accept the offer. As a result, up to $2 bln could be earmarked for share buyout and Enel could raise its interest to 70%.
The offer price corresponds to $700/kW valuation of installed capacity of the company's power plants. We do not rule out after the offer expires, the utility's stock valuations could correct below $600/kW and investors are advised to accept Enel's offer.
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