Bilfinger Said to Seek Bids for Power Business by Mid-Januaryby and
German engineering firm targets companies and buyout firms
Bilfinger may struggle to find buyer for unprofitable business
Bilfinger SE is seeking first-round bids by mid-January for its unprofitable power business, which builds and maintains nuclear, coal and hydro plants, as the German engineering group revamps operations, according to people familiar with the matter.
Bilfinger is reaching out both to companies and private-equity bidders as it aims to complete a sale in the first half of next year, said the people, who asked not to be identified because talks are private. The business could fetch between 200 million euros ($218 million) and 300 million euros, one of the people said. The goal is to sell it as a whole, though a piecemeal sale is also an option, another person said.
The Mannheim-based company may struggle to find a buyer because the business needs to be restructured amid a downturn in Europe’s power industry, another person said. The power business, which has been classified as discontinued operations, is forecast to have 2015 output volume of 1.2 billion euros ($1.3 billion) and an adjusted operating loss of 100 million euros, according to the third-quarter report.
Following a spate of profit warnings and mounting pressure from activist investor Cevian Capital AB, Chief Executive Officer Per Utnegaard is focusing on industrial and facilities management and shedding non-core businesses such as the power division, which has been hurt by Germany’s shift to renewable energy and a slowdown in the construction of new plants in Europe.
A spokesman for Bilfinger declined to comment.