Goldman Said to Be Among Buyers of $1.5 Billion Dong Stake

Goldman Sachs Group Inc. is part of a group that’s close to buying a stake in Dong Energy A/S, Denmark’s largest utility, a person involved in the transaction said.

The group, which includes a unit of New York-based Goldman and Danish pension funds ATP and PFA, will pay more than 8 billion kroner ($1.5 billion) for a stake that’s greater than 20 percent, said the person, who asked not to be identified because the talks are private. Danish newspaper Borsen reported earlier today that Goldman and the two funds are seeking a stake, without saying how it obtained the information.

Denmark’s government said in February it will sell a stake in the Skaerbaek, Denmark-based utility which is restructuring after losing money on failed natural gas bets. Goldman would be the lead buyer taking a greater stake than the pension funds, the person said.

Goldman wouldn’t say if the bank is seeking to buy a stake in Dong, according to an e-mail from Joanna Carss, a London-based spokeswoman.

The parties are still negotiating terms for how they would exit the investment, the person said. The buyers want a clause allowing them to sell their stake to the government or a timetable for an initial public offering of Dong shares, the person said.

The government pulled a planned IPO of Dong in 2008 after the global financial crisis triggered a stock market slump.

Stake Valuation

The Danish Finance Ministry in Copenhagen wouldn’t comment on the talks, spokesman Jakob Boeving Arendt said in an e-mail. Karsten Anker Petersen, a Dong spokesman, said the company had no comments on the share sale.

Hilleroed-based ATP declined to comment, Annemette Moesgaard, head of communications, said by phone. Thomas Torp, a spokesman at Copenhagen-based PFA, said by phone the fund had no comments.

Oestjysk Energi I/S, an Odder, Denmark-based minority owner in Dong Energy, in June exercised an option to sell a 1.06 percent stake to the government in a transaction that valued the whole utility at 33.2 billion kroner. The Oestjysk Energi transaction will be used to calculate the valuation of the stake bought by Goldman and the pension funds, the person said.

Finance Minister Bjarne Corydon said Feb. 27 that Denmark, which now owns an 81 percent stake in Dong, will retain a majority share in the utility and still plans to hold an IPO. A public listing would be relevant at the earliest in “some years,” he said then.

Dong is selling shares as part of a financial restructuring announced in February to cut costs, reduce debt and bolster investments in oil and gas exploration as well as offshore wind farms. The plan includes cutting costs by 20 percent and selling assets to raise 10 billion kroner.

Dong said in April the company is being advised by Nordea Bank AB and Morgan Stanley.

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