18 Feb 2002 – German utility giant RWE has approached British power utility Innogy to discuss a friendly offer which could value the electricity generator at up to £2.9bn ($4.16bn), according to a report in The Sunday Times.
The approach was made prior to Christmas but Innogy declined to comment on the story over the weekend.
The approach was made to Innogy Chief Executive Brian Count, but he said RWE’s proposed offer was too low, the paper said.
However, sources close to the talks believe the German utility will not walk away from the talks as Innogy fits in its long-term strategy, it said.
“In terms of mergers and acquisitions the focus is on Europe and the U.S., and there are limits to what can be done given that only four European countries have liberalised markets. We are talking to a lot of people,” the paper quoted an RWE insider as saying.
RWE has already struck deals in Britain by agreeing to acquire British gas producer Highland Energy Holdings in a move which will give the German firm access to gas reserves in the North Sea. Innogy, which trades as npower, is the second largest gas retailer in the UK. It has extensive power generation facilities and is expected to bid for Enron’s interest in its Teeside gas-fired power station.
RWE’s rival E.ON AG is expected to complete the take-over of British energy utility Powergen Plc later this year in deal valuing Powergen at €8.2bn.
Separately, press speculation linking Innogy with fellow UK power group ScottishPower was denied by ScottishPower on Friday.
In a statement, ScottishPower admitted that discussions had taken place as part of, “regular discussions with other leading industry participants”. It said that there were no ongoing talks and that ScottishPower had told Innogy it does not want to pursue conversations relating to a combination at the present time.