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UPDATE 2-Germany's Uniper flags higher dividends to fend off Fortum bid
December 7, 2017 / 11:57 AM / 8 days ago

UPDATE 2-Germany's Uniper flags higher dividends to fend off Fortum bid

* Dividends to rise through 2020

* Uniper remains opposed to Fortum offer

* Shares down 0.8 pct (Recasts, adds CEO, analyst, context)

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF, Dec 7 (Reuters) - German energy firm Uniper on Thursday promised higher dividends in coming years in its bid to convince shareholders not to tender their stock to Fortum in the Finnish group’s 8.05 billion euro ($9.49 billion) takeover bid.

Uniper’s management opposes the deal, saying it undervalues the group and makes little strategic sense given Uniper’s large exposure to gas- and coal-fired power plants compared with Fortum’s focus on clean technologies.

“Uniper, as an independent enterprise with a strongly cross-linked and valuable portfolio is very well positioned and has excellent prospects vis-a-vis the competition,” Chief Executive Klaus Schaefer said.

Uniper said it would pay a total dividend of about 310 million euros for 2018, up 24 percent from this year, adding payouts would increase by a quarter on average through 2020. It also flagged a possible future share sale to fund acquisitions.

At 1153 GMT, shares in Uniper were down 0.8 percent at 25.59 euros per share, above the 22 euros Fortum is offering and up more than twice since it was spun off from former parent E.ON and listed in September 2016.

“The timing of today’s update and the roadshows to follow thereafter in our view are motivated by the Fortum takeover transaction and to defend management’s hostile view of the takeover,” Bernstein senior analyst Deepa Venkateswaran wrote.

Under Fortum’s takeover offer, E.ON can sell its remaining 46.65 percent stake in Uniper by Jan. 11, 2018, which is seen as likely due to a large compensation fee the German group would have to pay if it fails to do so.

All other shareholders can tender their shares by Jan. 16.

Fortum on Thursday confirmed it would not raise its offer even after activist investor Elliott Management, known for buying into pending merger and acquisition (M&A) deals to extract higher offers, took a stake in Uniper this week.

The group reiterated it was mainly focused on E.ON’s Uniper stake, but would accept all shares. Under German takeover rules, Fortum had to extend its offer to all Uniper shareholders.

By Dec. 5, about 453,000 shares, or about 0.12 percent of Uniper’s share capital, had been offered to Fortum, a regulatory filing on the Finnish group’s website says.

Uniper said it expected adjusted earnings before interest and tax (EBIT) of 0.8-1.1 billion euros next year, down from an expected 1.0-1.2 billion in 2017. (Additional reporting by Vera Eckert and Jussi Rosendahl; Editing by Edmund Blair)

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