Engie (Buy, FV EUR15.5) said to weigh offer for all or part of EDP Renovaveis
ENGIE: (BUY, Fair Value EUR15,5 (+19%))Engie (Buy, FV EUR15.5) said to weigh offer for all or part of EDP Renovaveis (Neutral, FV EUR7.5)
According to Bloomberg, Engie (Buy, FV EUR15.5) is among suitors considering a bid for all or part of EDP Renovaveis (Neutral, FV EUR7.5). Despite an increase balance sheet flexibility following the recent disposal of its 69% stake in Glow, we would consider the option of Engie teaming up with CTG as more likely with Engie potentially acquiring only part of current EDPR’s portfolio as we believe that 1/Belgian nuclear provisions remain a sword of Damocles for the group and a 100% acquisition of EDPR would lead Economic Net Debt/EBITDA ratio close to 4x according to our estimates and that 2/the company is mainly interested in EDPR’s US assets (~EUR6bn EV, as per our estimates). Our first take estimates imply a potential 2019e-2020e EPS accretion of around 13% and 7% in the event of a) an acquisition of all of EDPR’s share capital and b) of US assets only. This morning, Engie said that it is not currently preparing a bid for EDP Renovaveis and that no decision has been taken yet on this topic.
Engie is an industrial group, based in France, active in the fields of gas, electricity, energy services and the environment. Co. is an energy provider across the entire energy chain, in electricity and in natural gas, including: purchase, production and commercialization of natural gas and electricity; transport, distribution, management and development of major natural gas infrastructures; design and commercialization of energy services and environment-related services. Co.'s activities are conducted through five segments: Energy Europe, Energy International, Global Gas and LNG, Infrastructures, and Energy Services.
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