E.ON's Italy sale draws bidders as deadline falls

The sale of E.ON's Italian assets has drawn interest from a handful of energy companies and investment funds on the final day for binding bids, sources familiar with the matter said on Monday.

 

Two sources said French energy giant EDF was also looking to make a non-binding bid, outside the official process, for all the assets through its Italian utility unit Edison.

 

E.ON has not yet decided if it will sell its Italy business, which could be worth more than 2 billion euros ($2.5 billion), in a single block or in parts, sources have said.

 

E.ON, Germany's biggest utility, put its Italian businesses up for sale more than a year ago to help cut debt, but Europe's depressed power market has prompted a series of delays.

 

The group's power and gas clients and renewable assets have drawn interest but most of the traditional generation business has left investors cold as the economic crisis undermines demand and depresses prices.

 

Three sources said Italy's biggest utility Enel and regional player Hera had made binding bids for E.ON's client portfolio as had smaller gas and power marketing group Gala.

 

Energy group Erg and infrastructure fund F2i had made offers for the renewable assets, two of the sources added.

 

E.ON's renewable energy operations, including a prize hydroelectric plant worth around 1 billion euros, had also drawn interest from investment fund Brookfields, two sources said. The wind and solar operations are valued at around 300 million euros, they said.

 

EDF, Enel, Hera, Erg and F2i declined to comment while Gala could not be reached.

 

Sources also said investment funds Contour Global, Terra Firma and Germany's Aquila Capital had expressed interest in some assets.

 

E.ON Italia, Italy's No. 4 electricity provider, has assets that include 6 gigawatts of generation capacity, a stake in a liquefied natural gas terminal and gas and power sales.

 

A banker familiar with the matter said the group's 598 megawatt coal plant in Sardinia, worth around 200 million euros, had also stoked interest.

 

"Shanghai Power has been aggressive on this," the banker said but declined to say if the Chinese company had tabled a binding bid.

 

Earlier this month sources told Reuters E.ON had entered exclusive talks to sell its Spanish activities to Australia's Macquarie Group.