EON Said to Name Spinoff, Board Members Before AGM on May 7

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EON SE, the German utility that’s breaking itself up, will name its new spinoff company and management-board members before a shareholders’ meeting on May 7, two people with knowledge of the plan said.

EON will also specify the division of assets, the people said, asking not to be identified because the information is private. The Dusseldorf-based utility will probably post the details to shareholders in the week before the annual general meeting, they said.

Germany’s largest utility on Nov. 30 announced plans to spin off fossil-fuel power plants into a separate company to focus on renewables. It’s the most radical response yet to the country’s shift to wind and solar energy, which has shut down nuclear reactors and undermined power prices, eroding the profitability of traditional utilities.

EON will also tell shareholders where both companies will be based, one of the people said.

While most of the utility’s renewable-energy assets will remain at the parent company, the 288-megawatt Amrumbank West wind farm in the North Sea will be part of the spinoff business, two people said. That’s because it belongs to EON Kraftwerke GmbH, which operates power plants at 20 sites in Germany -- a legal construction too expensive to dissolve.

EON rose 0.4 percent to 14.49 euros at 9:36 a.m. in Frankfurt on Wednesday.

Birnbaum, Teyssen

The spinoff will have about 18,000 staff, one person said. It may be led by EON management-board member Leonhard Birnbaum, while Johannes Teyssen may head its supervisory board as well as remaining EON chief executive officer, the person said, confirming a Rheinische Post report.

The report also suggested EON Chief Financial Officer Klaus Schaefer could lead the spinoff, whose name is being developed by branding agency MetaDesign, according to the newspaper.

Georg Oppermann, a spokesman for EON, declined to comment when called on Tuesday.

EON said last year that it would concentrate on renewables and distribution while the spinoff would focus on conventional and hydropower generation, global energy trading, and parts of the exploration and production business.

The spinoff may keep the North Sea E&P division, one person said. EON is working with Bank of America Corp. on the potential sale of the North Sea assets, which may fetch about $2 billion, people with knowledge of the matter said last month.

The spinoff may have a total enterprise value of 15.8 billion euros ($17 billion) and an equity value of 5.2 billion euros, Deepa Venkateswaran, an analyst at Sanford C. Bernstein & Co., said in a March 25 note.

EON will divest its minority stake in the spinoff within two years of its creation, a person familiar with the matter said last month.

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