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Innogy shares soar in pre-market on break-up plans

Reuters  |  ESSEN, Germany 

By Christoph and Tom Käckenhoff

ESSEN, (Reuters) - saw its stock jump 16 percent in pre-market trade on Monday after parent RWE and rival E.ON announced plans to divide up the operations of Germany's largest company by market value.

The plans, announced on Sunday, are part of sweeping changes by utilities as they look to bolster and prepare for Germany's exit from nuclear power in 2022.

They come just two years after RWE spun off renewable, retail and network operations to form and E.ON split off some of its business to create

Shares in were indicated to open 16 percent higher in pre-market trade. RWE, which owns 76.8 percent of Innogy, was indicated 8 percent higher and E.ON was seen up 6 percent.

As part of Sunday's deal, E.ON plans to launch a 40-euro-per-share, or 5.2 billion euro ($6.4 billion), offer to Innogy's minority shareholders, a 16 percent premium to Friday's closing price.

"We believe that this development will be taken very positively as the market will see a 40 euros per share takeover offer as very likely for Innogy," Macquarie analysts said in a note, raising their rating to "outperform" from "neutral".

The deal, if approved, would spell the end for as a standalone company. The company, in turmoil since former resigned in December, on Monday announced plans to cut 400 million euros in costs through the end of 2020.

"We are making fit for future challenges, just like our customers, employees and shareholders expect us to. We will comment on the latest announcements by and in due course," said.

reported a 3 percent rise in 2017 adjusted operating profit and said it would propose a dividend of 1.60 euros per share for 2017, unchanged from a year earlier.

($1 = 0.8120 euros)

(Editing by Tom Sims and Jason Neely)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, March 12 2018. 15:05 IST