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Shell, Mitsubishi, Macquarie and KKR continue in Eneco auction

Eneco Group operates more than 2,000 MW of renewable energy and serves over two million customers in The Netherlands, Belgium and the UK.

According to insiders, Dutch-British Shell, in collaboration with Dutch pension investor PGGM (healthcare and welfare sector), offers a great opportunity to win the takeover battle. With its New Energies division, Shell has set aside billions to invest in green energy.

Printed below is an English translation of an article published today by the Dutch FT, Financieele Dagblad.

Shell, Mitsubishi, Macquarie and KKR continue in Eneco auction

Gijs den Brinker

Four parties are in the battle for energy company Eneco. This is a consortium of oil and gas company Shell and pension investor PGGM, the Japanese company Mitsubishi, the Australian infrastructure investor Macquarie and the American investor KKR.

Multiple sources say that to the FD. KKR is a surprising name in the playing field. Never before was it known that the American investment company was making a shot at the energy company that advertised itself as green.

Eneco is currently owned by 44 municipalities, including Rotterdam and The Hague, but is for sale. Candidate buyers were able to express their interest until the end of May. The sale goes through a so-called controlled auction. At the end of last week, the company, together with representatives of the shareholders, decided which parties could continue to the next round.

Carrying capacity is important

Eneco must provide at least € 3 billion, say those involved. However, the sale does not only look at the price, but also at the financial strength of the buyer and the extent to which he is willing to invest in the green energy company. Eneco is capital intensive: in the coming years, the company will invest hundreds of millions of euros in the construction of offshore wind farms.

According to insiders, Dutch-British Shell, in collaboration with Dutch pension investor PGGM (healthcare and welfare sector), offers a great opportunity to win the takeover battle. With its New Energies division, Shell has set aside billions to invest in green energy. PGGM also invests a lot in sustainability.

APG also wants to participate

The Dutch pension investor APG (civil servants) is also looking for a role in the acquisition of Eneco. It would like to join one of the other bidders. APG seemed previously to join either the French Total or the Italian Enel, but both oil and gas companies are not involved in the sales process. A person involved is surprised about the disappearance of Enel. “Enel is already very active in green energy and can get money cheaply for a takeover of this size.”

A large number of municipalities, together accounting for more than 95% of the shares, have already indicated that they want to sell. A sale should therefore be made without too many bumps.

A lot of resistance

Nevertheless, the shareholders and the company devote a lot of time to the sale, because there was a lot of internal opposition earlier. In the run-up to the sales process, there was, among other things, a breach of trust between supervisory directors and the Works Council and a dispute between the director and the supervisory directors.

The remaining bidders must make a binding offer at the end of October. The sale would not be settled until 2020.

SOURCE

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