RWE's largest shareholder group is against more share buybacks
RWE's largest shareholder group, RWE municipal shareholders, opposes calls for further share buybacks. This includes activist investor Elliott. They say that they will drain cash for renewable investments.
The Association of Municipal RWE Shareholders (VkA), who together own around 14% of the utility, has made a few rare comments in support of RWE Management amid increasing investor criticism of capital allocation.
RWE, like its peers, cut investments in renewable energy projects in March due to the falling returns. Some investors urged RWE to speed up a buyback program worth 1.5 billion euros ($1.7 billion).
Elliott is one of them. It holds close to 5% of RWE, and it's also currently running a high profile campaign for change in the oil giant BP. Elliott said that RWE shares were undervalued, and expressed disappointment with RWE's lack of transparency.
Deka Investment and Selwood Asset Management, as well as Enkraft Capital have asked the group to increase buybacks in order to boost its share price. Union Investment has even called for a special dividend.
Detlef Raphael is the managing director of VkA. This was the first time municipal shareholders from RWE have spoken out on this issue.
He added, "As soon as I buy back or give away money on a large-scale, I don't have the capital to invest in renewable energy."
The municipalities support RWE's direction.
The VkA is made up of cities, districts, and associations that are RWE shareholders, mostly in North Rhine-Westphalia.
RWE's annual general meeting, which takes place on Wednesday, says that the buyback program will remain a part of RWE's future strategy. However, it has not yet changed its current programme, which runs through to the second quarter 2026.
(source: Reuters)
