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Innogy soars on bids
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February 18, 2002: 3:49 a.m. ET
Report: RWE makes $4.2 billion offer for UK power company, Innogy stock soars
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LONDON (CNN) - British power company Innogy Holdings' shares soared on Monday after the company said it received a number of takeover approaches.
Innogy's stock rose 20 percent to 252 pence at the start of trading in London. An offer would value Innogy at least £2.3 billion ($3.3 billion) based on its market value at the close of trade on Friday, excluding debt.
While Innogy, Britain's biggest electricity supplier, declined to name the bidders, the Sunday Times said German utility RWE (FRWE) had made an offer worth up to £2.9 billion.
"The board confirms it has received approaches which may or may not lead to an offer being made to the company," said Innogy on Sunday. "A further announcement will be made when appropriate."
Scottish Power, Britain's second biggest electricity company by market value, said on Sunday it approached Innogy with a merger proposal but had since decided not to pursue a merger at the present time.
Britain's utility market was the first in Europe to open up to competition and is undergoing an overhaul after U.S. energy companies, which dominated takeover activity, pulled out as they raise cash to bolster poorly finances.
RWE, which agreed last September to buy U.S. water utility American Water Works for $4.6 billion plus $3 billion of debt, has been on the acquisition trail since the German market was liberalised in 1998.
Growth in competition led to lower power prices, so it acquired Britain's Thames Water for $9.8 billion two years ago.
RWE, Germany's second-largest utility, has said in the past it is keen to make acquisitions in the UK and Spain. RWE's archrival E.ON agreed last year to buy Britain's Powergen in an 8.2-billion-euro takeover that will make it Europe's second-largest listed power group behind Italy's Enel.
RWE spokesman Bill McAndrews told Reuters it was corporate policy never to comment on speculation.
"In terms of mergers and acquisitions, our focus is on Europe and the United States for the four core business areas, which are electricity, water, gas and waste management," he added.
The Sunday Times said Innogy Chief Executive Brian Count had rejected late last year RWE's proposed offer as too low. Innogy has been expanding aggressively, buying Yorkshire Power and Northern Electric a year ago but its debt has grown making it a bid target.
Shares in RWE slipped 0.5 percent to  40.95 in early Frankfurt trading on Monday. The company has a market value of $20.1 billion, according to Reuters data. 
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