Suzlon Energy, which upped its offer for German wind turbine maker REower Systems to 150 euros per share, indicated on Tuesday that it might hike its offer again if the need arose. It will also continue to pick up shares from the open market.
The current offer comes after the Suzlon special purpose vehicle Suzlon Wind Energie Gmbh picked up a 7.7 per cent stake in REpower through open market purchases over the last week at prices up to 150 euros per share.
Suzlon Chairman Tulsi Tanti said he had indicated that the company was very comfortable at the current offer price, at which REpower is valued at 1.22 billion euros ($1.6 billion).
Spokesperson for Suzlon Vikas Kher pointed out that if Suzlon picked up all the REpower shares even at the current price, the debt-equity ratio of the company at the end of year 2007-08 would be 1:1.45.
"Currently, the ratio is below 1. If we pick up 70 per cent, the ratio will be at 1:1.20 and if we pick up only 51 per cent the ratio will be 1:1.05," Kher pointed out.
Rival bidder Areva already holds a 30 per cent stake in REpower while Suzlon and its partner Martifer now hold around 33 per cent.
Rival bidder Areva already holds a 30 per cent stake in REpower while Suzlon and its partner Martifer now hold around 33 per cent.
The offer is open up till April 20 and REpower shareholders have the opportunity to accept this offer by that date. However, a counter-bid by Areva can increase the time limit. Areva had earlier bid 140 euros per share, exceeding Suzlon's first bid of 126 euros per share.
The entire takeover is to be funded through debt to be arranged by ABN Amro Bank. This will be infused as equity into the Suzlon Wind Energie. Partner Martifer has already transferred its 25.4 per cent holding in REpower to Suzlon Wind Energie and now hold a 25 per cent stake in it.