Uniper / Fortum

Uniper / Fortum: Bumping Offers Versus Building Stakes in German M&A

Publication Date: November 17, 2017

Research Report Overview

With Uniper shares trading 8.6% higher than Fortum’s €22 per share voluntary offer price, Fortum’s patience will be tested as it waits for Uniper’s share price to migrate lower - is it content with only acquiring the 46.65% Uniper stake held by E.ON (EOAN GY), or will it be pushed into increasing the offer to build its stake higher? Fortum insists it has “no plans nor any reason to raise the offer”, but the company’s ambitions and enthusiasm for acquiring Uniper have been laid clear - event driven funds are, in turn, looking for clues to suggest that Fortum may be compelled to bump its offer. In this report, we examine precedent German tender offers to determine: 1) the key factors that lead to bumps; 2) which precedents are the most similar to Uniper / Fortum; and 3) the feasible outcomes from now through the end of the acceptance period.

Contents (40 Pages):

1. Fortum’s Stance: Weighing Patience and Discipline with Additional Benefits 2. Uniper’s Stance: Challenged to Protect its Independence 3. E.ON’s Stance: Acceptable Sale but Handcuffed to It 4. Precedents: Structures, Premiums, Trading and Ownership 5. Factors Influencing Bumps and Possible and Likely Outcomes 6. Post-Tender Offer Completion - Potential Trading Risks 7. Deal Structure and Timing 8. Uniper’s Standalone Price and Risk Arbitrage Considerations 9. Risk Arbitrage Trading Considerations

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Deal Timeline

Uniper / Fortum

End Date: June 26, 2018

June 2018

May 2018

April 2018

March 2018

February 2018

January 2018

December 2017

November 2017

October 2017

September 2017

Deal Announced: September 20, 2017
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