UPDATE: RWE: American Water Greenshoe Option Fully Exercised
09 June 2009 - 7:01PM
Dow Jones News
RWE AG (RWE.XE) Tuesday said the greenshoe option the German
utility has granted the bookrunners of last week's placement of
shares in American Water Works Co. (AWK) has been fully exercised,
reducing its stake in the U.S. water utility to around 47%.
A spokesman for RWE said all 3.9 million shares on offer will be
placed with the bookrunners - Merrill Lynch & Co., Citi and
Goldman, Sachs & Co. - at $17.25 a share, the same price buyers
paid in the secondary offer last Friday.
The proceeds of the greenshoe transaction amount to around $67
million, the spokesman said.
Last Friday, RWE sold 11.5 million shares in American Water in a
secondary offer that supplemented a rights issue by American Water.
The transaction resulted in proceeds of around $200 million for
RWE, with the firm lowering its stake to below 50% from around
60%.
RWE had previously announced its intention to reduce the stake
in American Water to below 50% to fully deconsolidate the U.S.
water utility from its balance sheet. The company last week said
the deconsolidation of American Water will result in a reduction of
net debt by around EUR4.5 billion.
RWE said the company still wants to sell all of its shares in
American Water, but has said the exact timeframe depends on the
wider market environment.
Around a year ago, RWE sold around 36% of American Water's
shares at $21.50 a share in an initial public offering. The IPO
price was lower than had been expected and resulted in a EUR600
million impairment charge that considerably dented RWE's 2008
earnings.
Company Web site: www.rwe.com
-By Jan Hromadko, Dow Jones Newswires; +49 69 29 725 503;
jan.hromadko@dowjones.com