E.ON dismisses call for new spin-off business

A suggestion by one of E.ON’s shareholders to spin off the company’s power distribution business is unlikely to be heeded by management at the German utility.

Activist investor Knight Vinke has renewed calls for the company to spin off the division just months after the company floated its coal and gas power business.
E.ON chief Johannes Teyssen
“There is huge institutional [investor] demand for a pure network business, and the value of that would be substantially greater than that of [E.ON] as a whole,” he added. “For investors looking for [dividend] yield, it’s exactly the kind of asset they’d want to own.”

Vinke owns about 1 per cent of the company added that spinning off the regulated grid assets “would result in a standalone business with far stronger credit metrics and investment capacity”.

An E.ON spokesman said almost 97 per cent of votes cast at the annual meeting in June backed the company’s strategy to focus on all three of its business areas, and Eon was now implementing it. “A disposal of the networks would conflict with that,” he added.

Eon has already split into two, pooling its coal and gas-fired power stations, energy trading and gas production into a separate company, called Uniper, which debuted on the Frankfurt stock exchange in September.

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