RWE Won't Pursue Talks With Potential Partner on Stake Sale

  • Utility will instead focus on partnerships for single projects
  • Shares in utility dropped 54 percent in 2015 as Dax gained

RWE AG won’t sell a stake in the company to an outside investor, with negotiations instead focusing on single projects in the Middle East and North Africa.

“We don’t pursue the issue of an equity participation,” Vera Buecker, an Essen-based spokeswoman for Germany’s largest power producer, said Thursday by phone. “Our talks focus on the implementation of single projects in the MENA region, which may result in a long-term partnership.”

The utility had been in talks to sell a 10 percent stake in the company to an Abu Dhabi investor since last year, people with direct knowledge of the matter said in March. Shares in RWE slumped 54 percent this year to a record low this week as power prices in Europe’s biggest economy are near their lowest in more than a decade.

“The hope for financial aid by an Arabic investor has evaporated,” Erkan Aycicek, an analyst at Landesbank Baden-Wuerttemberg, said Thursday by phone from Stuttgart. “The share price was put under pressure the last days” amid speculation in the media that utilities haven’t put aside enough funds to pay for the dismantling of their nuclear reactors, he said.

RWE may revisit the plan to sell to an Arab investor, Thomas Deser, a fund manager at Union Investment, said by e-mail on the stock sale talks.

RWE rose 9 percent to close at 11.845 euros in Frankfurt, with trading amounting to more than four times the daily three-month average. It pared an earlier jump of as much as 12 percent, the most since November 2008. The company underperformed the 4.3 percent gain in the nation’s benchmark Dax Index this year.

Shares in RWE as well as in EON SE, its larger competitor, jumped earlier Thursday after Germany’s deputy economy minister Rainer Baake said media reports this week on atomic provisions are “irresponsible.” The articles raised concerns that both companies’ provisions for their nuclear decommissioning may be insufficient.

EON rose as much as 8.4 percent, the most since December 2008, and closed at 8.13 euros.

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