Areva raises bid to $1.5 bn for REpower

Areva SA, the world's largest manufacturer of atomic power stations, raised its bid for German wind-turbine builder REpower Systems AG, countering an offer by Suzlon Energy of India and valuing the company at ¤1.14 billion ($1.5 billion).

Areva, based in Paris, offered ¤140 a share for the 70 per cent of REpower it doesn't already own, the company said today.

Suzlon, based in Ahmedabad, last month topped the French company's initial ¤105 price with a bid of ¤126 a share.

The increased offer coincides with a global surge in wind-power projects as governments seek to cut carbon emissions linked to global warming and reduce their dependence on oil. REpower last month said it won orders valued at about ¤92 million from Electricite de France SA for turbines in the U.K. and France.

"Renewable energies are very interesting for Areva, especially since they offer a way to diversify away from nuclear power," said Jean-Michel Salvador, an analyst at Fideuram Wargny in Paris with a "reduce" rating on Areva shares. "The problem may be that the price seems to have gotten a bit disconnected from reality.''

REpower shares jumped as much as ¤17.79, or 14 per cent, to ¤149.49 and were trading at ¤148.08 by 11.17 am in Frankfurt. The stock has more than doubled since December, giving the company a market value of ¤1.20 billion.

The latest offer is a 56 per cent premium on the company's closing share price on January 19, the last day of trading before Areva announced its first bid.

Areva, which became a REpower investor in 2005, plans to use its network of utility customers to drive sales of wind turbines.

Hamburg-based REpower has operations in France and elsewhere in Europe and aims to expand in China, India and North America.

"The increased offer reflects Areva's strong engagement for REpower and its management,'' said the company, which is majority-owned by the French state. The bid is part of a strategy to expand its renewable energy business, said Areva, which has already agreed to buy enough REpower shares to give it a 30 per cent stake.

"We have noted Areva's offer and are awaiting complete details," Suzlon spokesman Vivek Kher said in a telephone interview from Pune, India. "We will evaluate the offer once we have complete information and will respond accordingly.''

REpower management said on February 19 that Areva would be a "fitting strategic partner", without endorsing either bid.

Suzlon managers met with REpower on March 2 and said the German company was "interested" in Suzlon's offer.

Increasing demand enabled REpower, Germany's third-largest maker of wind-power equipment behind Vestas Wind Systems A/S and Enercon, to post full-year profit of ¤7.1 million compared with a year-earlier loss of ¤6.8 million.

Suzlon's bid is being made in partnership with Martifer, a unit of Portuguese builder Mota-Engil SGPS SA that already owns a quarter of REpower. Martifer described its stake in REpower as "strategic" but wouldn't say whether it would sell the shares.

Areva said on March 5 that it had received European Union antitrust approval for its bid. The offer period ends on April 20.

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CHANGE OF WIND

AREVA SA, based in Paris, offered ¤140 a share for the 70 per cent of Repower it doesn't already own

SUZLON ENERGY, based in Ahmedabad, last month topped the French company's initial ¤105 price with a bid of ¤126 a share

THE LATEST offer is a 56 per cent premium on the company's closing share price on January 19, the last day of trading before Areva announced its first bid