If RWE Unit Sale to Fridman Falters, Hungary's MOL Still Keen

Reuters

FRANKFURT, Oct 16 (Reuters) – MOL Group would be interested in re-entering talks to buy RWE's DEA unit if a sale to Russian billionaire Mikhail Fridman fails to secure British approval, the Hungarian energy firm said on Thursday.

RWE struck a deal in March to sell DEA for 5.1 billion euros ($6.52 billion) to a Fridman-led group of investors but warned two weeks ago that it was still lacking approval from the British government.

British Energy Secretary Ed Davey is "not minded" to sign the required letter of assurance in light of recent sanctions against Russia over the Ukraine crisis, the Financial Times newspaper quoted a person familiar with matter as saying on Wednesday.

MOL and BASF unit Wintershall were among the other parties which submitted binding bids for DEA, sources said at the time.

"We are always open and approachable if someone from the industry wants to explore options," an MOL spokesman said on Thursday.

RWE, Wintershall and Fridman-led investment fund LetterOne all declined to comment.

Shares in RWE, Germany's second-biggest utility, were down 3.2 percent at 0931 GMT, reflecting concerns about whether the sale would go ahead as planned.

RWE warned two weeks ago that it was still lacking approval from the British government.

"Continuing uncertainty may drag on RWE shares with alternative buyers like BASF potentially going for a fire sale price," Equinet analyst Michael Schaefer wrote while maintaining a "hold" rating on the stock.

With operations in 14 countries, DEA owns stakes in about 190 oil and gas licences or concessions in Europe, the Middle East and North Africa. RWE requires approval from local governments to complete the transaction.

DEA's British assets are worth about 1 billion euros, analysts said. They noted RWE might opt to carve out these assets and sell them separately at a later date if it does not obtain UK clearance.

"RWE could sell all DEA assets, bar UK, to LetterOne at a reduced price, and sell the marketable UK assets (including Breagh) separately to another investor, admittedly on an extended timetable," analysts at RBC Capital Markets wrote.

RWE said on Thursday it was still planning to close the sale to LetterOne by the end of the year.

($1 = 0.7818 euro)

(Additional reporting by Tom Kaeckenhoff in Duesseldorf and Frank Siebelt and Arno Schuetze in Frankfurt; Editing by Maria Sheahan)

 

Copyright 2016 Thomson Reuters. Click for Restrictions.

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