(Bloomberg) -- Germany’s government has selected banks to arrange a potential selldown of power company Uniper SE, which could rank among the country’s biggest share sales in recent years, according to people familiar with the matter.
Citigroup Inc., Deutsche Bank AG and UBS Group AG have been appointed as joint global coordinators on the potential offering, the people said, declining to be identified because the information is private. More banks could be added to the lineup ahead of the share sale in the first quarter of next year, the people said.
The German state owns more than 99% of Uniper after bailing out the company, the country’s biggest buyer of Russian gas, in the wake of Russia’s invasion of Ukraine in 2022. The remaining fraction still trades on the Frankfurt Stock Exchange, where the company has a market value of €20.5 billion ($22.5 billion). Any stake sale could come with a significant discount given the lack of liquidity, while it’s too early to tell how big the discount is, the people said.
Deliberations are ongoing and details including the timeline could still change, the people said. A representative for Uniper confirmed banks have been hired, without identifying them. The company is ready for a sale via capital market as the preferred option, making all necessary preparations in close coordination with the federal government, the representative said.
Representatives for the banks declined to comment, while the government didn’t immediately respond to a request for comment.
The European Commission required Germany to reduce its stake in Uniper to not more than 25% plus one share by the end of 2028 when it approved the bailout. UBS was appointed alongside consultancy firm Roland Berger to advise the government on options to cut its stake in the Frankfurt-listed company, Bloomberg News reported earlier this year. With a limited free float, market participants consider a share sale in Uniper to essentially be a fresh initial public offering, or “re-IPO.”
Some European governments are cutting stakes in companies amid the recent market rally. Germany sold some of its Commerzbank AG stake last month after the lender’s stock price surged. However, the government was caught off guard when Italy’s UniCredit SpA snapped up the 4.5% stake it offloaded and became Commerzbank’s second largest shareholder.
Before a share offering, Uniper is trying to sell some assets including coal procurement contracts that could weigh on its valuation because investors tend to stay away from fossil fuel-related activities, people familiar with the matter have said. The company last month said it intends to sell its coal-fired power plan Datteln 4 in North Rhine-Westphalia, and it also permanently shut down its hard coal power plant Heyden 4 Petershagen near Minden.
--With assistance from Eva Brendel and Michael Nienaber.
(Updates Uniper’s comment in fourth paragraph.)
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