Suzlon revises bid for REpower to Euro 150/share

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Suzlon revises bid for REpower to Euro 150/share

Suzlon has acquired 7.7% stake in REPower from Martifer and have revised the price to Euro 150/share to counter Areva's bid of Euro 140/share.

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Suzlon has acquired 7.7% stake in REPower from Martifer and have revised the price to Euro 150/share to counter Areva's bid of Euro 140/share.

Few key takeaways from Suzlon counter bid offer: 

• Suzlon's step down subsidiary acquires 7.7% stake in REpower at EUR150/share from open market
• Suzlon technically has right to 33% stake in REpower
• Suzlon's second counter offer 7.2% higher than Areva's EUR 140/share offer which is currently open
• Markets were widely anticipating this move of offer at EUR 150 and above
• Current mkt price for REpower is EUR 154/share
• The acceptance period for this takeover offer expires on 20 April 2007
• Takes the total value at $1.63 bn
• REpower acquisition to be EPS Neutral for FY08; Accretive for FY 09
• Would Mop Up Shares From Open Mkt To Up Stake To 50%
• Suzlon requires to invest intially EUR 300 m to acquire 25% stake from open market
• Comfortable with bid price of EUR 150; open to hiking price if Areva increases bid
• Areva has upto April 20 to hike bid; Bid period gets extended by 2 wks if Areva hikes bids
• REpower bid based on March 09 estimated valuations
• Sees Payback Period For REpower Buy At 5-6 Years: Suzlon
• Has tied-up financing for REpower bid; has Additional Financing Facility: Suzlon

Suzlon's trump Card:

• Suzlon in agreement with Martifer for rights to acquire 25.38% stake 
• As on Mar 6th Suzlon indirectly owns rights to acquire 25.38% stake in REpower
• Suzlon owns rights via AE-Rotor Holdings which controls SE Drive Technik GmBH
• SE Drive Technik holds financial instrument to acquire 2.06 m shares in REPower Systems
• Acquisition gives SE Drive 25.38% voting rights in REPower

Right to Acquire subject to certain conditions 

• After 1 yr of additional acceptance of public takeover of REpower
• Suzlon open offer was to end on May 10, 2007
• Or After 2nd Anniversary if REpower bags Portugese govt order for wind power turbines