RWE’s Innogy IPO Price Range Values Unit at Up to $22 Billion

RWE AG, Germany’s largest power producer, set the price range for an initial public offering of its Innogy SE unit at 32 to 36 euros a share, giving it a potential market value of as much as 20 billion euros ($22.4 billion).

Innogy, which includes the renewables, retail and grid businesses of its parent, expects to raise as much as 2 billion euros from a capital increase of about 10 percent. There will also be a secondary placement of at least 10 percent of existing Innogy shares by Essen, Germany-based RWE, according to a statement late Thursday.

“We are now putting in the final sprint in the Innogy IPO,” Chief Executive Officer Peter Terium said in the statement. “In our talks with institutional investors and analysts we were met with significant interest in Innogy shares.”

Germany’s biggest utilities have been forced to take steps to mitigate the nation’s shift away from nuclear, coal and natural gas toward wind and solar generation, a policy that’s undermining power prices and hurting their profitability. RWE is focusing on nuclear, fossil-fuel generation and energy trading, while EON this month listed most of its Uniper unit and kept renewables, grids and household customers for itself.

BlackRock Inc. has submitted a binding purchase order for 940 million euros as part of the secondary offering on behalf of its clients. The number of Innogy shares it will buy depends on the issue price.

While RWE may sell more of Innogy in the future, it plans to keep a majority. There’s a lot of interest in the company from long-term investors such as pension funds, infrastructure funds or yield funds, Terium has said.

EON on Sept. 12 distributed 53 percent of Uniper to existing shareholders. It intends to sell the remaining stake in 2018 at the earliest.

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