KKR launches $3 billion public takeover offer for Encavis

By Thomson Reuters Mar 14, 2024 | 3:58 AM

By Emma-Victoria Farr

FRANKFURT (Reuters) -Private equity firm KKR has launched a 2.8 billion-euro ($3.06 billion) takeover offer for German electricity and energy producer Encavis, the company said on Thursday.

Elbe Bidco, an investment vehicle owned by KKR is to offer a cash consideration of 17.50 euros ($19.13) per Encavis share.

Encavis shares were up 27% in early Frankfurt trading.

The management board and supervisory board of Encavis have expressed their support for the offer. Encavis had confirmed talks with KKR last week.

German family business Viessmann will invest as a shareholder in the KKR-led consortium, after which it will hold a significant minority stake, it said in a statement. This is Viessmann’s first major commitment since selling its core heating systems business to Carrier Global Corp in a 12 billion-euro ($13.13 billion) deal last year.

KKR and the management board intend to delist Encavis as soon as possible after closing. The management plans to remain on board under the new ownership.

KKR has already secured 31% of shares in the Hamburg wind and solar park operator from a group of major shareholders, as both sides announced on Thursday.

The financial investor’s offer is 30% above the closing price of Encavis shares listed in the MDAX small cap index on Thursday.

Encavis shares fell to their lowest level in almost four years in February. Three years ago the valuation was almost twice as high.

Through the takeover, Encavis will “increase its contribution to the green energy transition in Europe,” KKR said. “The consortium plans to strengthen the company’s project pipeline, expand capacity and expand its presence in core markets.”

Encavis operates 40 onshore wind farms and 190 solar farms across Europe. The company also builds and maintains wind and solar parks through an Italian subsidiary.

($1 = 0.9147 euros)

(Reporting by Tristan Veyet and Marleen Kaesebier in Gdansk, Emma-Victoria Farr in FrankfurtEditing by Miranda Murray, Tomasz Janowski and Sharon Singleton)