E.ON AG may sell its 6.4% stake in Russia's state-run natural-gas company, OAO Gazprom, to finance a €41 billion ($53 billion) takeover bid for Endesa SA, Goldman Sachs Group Inc. analysts said in a report.
Duesseldorf, Germany-based E.ON is Gazprom's fourth-largest investor with about 1.5 million shares, according to stock exchange filings. The Gazprom stake is worth about $16.6 billion at current prices and could be worth about €11.1 billion after taxes, Goldman estimated. Selling the stake in Gazprom, the world's largest gas company, would be a logical way to finance E.ON's sweetened bid for Endesa, which would be the world's largest utility takeover, Goldman said. „Given that E.ON's holding in Gazprom affords it no effective management control, we believe that a part-disposal of this holding may be used to help finance the acquisition,” London-based Goldman analysts Deborah Wilkens and Irma Sgarz wrote in a February 5 report.
They rated E.ON „buy.” E.ON, Germany's largest utility, increased its bid for Spain's biggest power company after the market closed on February 2 by 12% to €38.75 a share. It said asset sales could help finance the transaction. „If needed, we will look at asset disposals or capital increases, but only if that is needed,” E.ON CEO Wulf Bernotat said in a February 3 interview in Madrid. Josef Nelles, an E.ON spokesman, couldn't be immediately reached for comment today. The report estimated E.ON's US assets have a value of about €3.4 billion. The US is E.ON's smallest market with, estimated 2006 operating profit of €536 million, about 5% of Goldman's estimates for E.ON's 2006 operating profit. E.ON has about €16.3 billion in cash and cash equivalents, the report said. Goldman has a €120 price target on E.ON shares, a 9% premium to E.ON's price of €110.81, up 1.6%, at 11:24 a.m. in Frankfurt. (Bloomberg)