EnBW Said Close to Selling EVN Stake at Premium; Shares Rise

(Bloomberg) --

EnBW Energie Baden-Wuerttemberg AG, one of Germany's Big Four utilities, is close to selling its stake in Austrian peer EVN AG to the utility owned by the city of Vienna at a premium to the current price, according to people familiar with the process.

EnBW is discussing the deal in a supervisory board meeting today and plans to sign it this week, said the people, who asked not to be identified because the process is private. Vienna's Wiener Stadtwerke GmbH could pay more than 870 million euros ($971 million) for the stake, a premium of more than 10% on Tuesday's closing price, one of the people said.

EVN rose as much as 7.1% in Vienna, the biggest advance since 2010. It traded up 4% at 16.02 euros by 11:34 a.m., outperforming the Bloomberg European Utilities index, which was 1.9% higher. EnBW rose as much as 6% in Frankfurt.

Buying the stake, which stood at 28% at the end of last year, would make Vienna EVN's second-biggest shareholder after Lower Austria, the Austrian province surrounding the capital, which owns 51%. About 20% of the company are widely held. Talks are ongoing and could still be delayed or fall apart, according to the people.

EnBW, which first bought a stake in EVN in 2002, was among international utilities such as RWE AG and Electricite de France SA that tried to invest in Austrian utilities around the turn of the century. The German utility has unsuccesfully tried to sell the stake for years.

Spokespeople for EnBW and Wiener Stadtwerke declined to comment. EVN's spokesman Stefan Zach said the company doesn't comment on rumors and on questions relating to its owners.

Vienna was recruited as a “white knight” by EVN executives and politicians from the Lower Austria province to prevent a bid from a private equity investor, one of the people said. Austria's constitution requires utilities to be 51% state-owned. The country's biggest is Verbund AG, which is owned by the federal government.

To contact the reporter on this story: Matthias Wabl in Vienna at mwabl@bloomberg.net

To contact the editors responsible for this story: Boris Groendahl at bgroendahl@bloomberg.net;Aaron Kirchfeld at akirchfeld@bloomberg.net

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