* Fortum to pay 2.3 bln euros for activist stakes
* Move would bring it closer to full control of Uniper
* Uniper shares down 6.9%, Fortum up 2.9%
(Recasts, adds details, analyst comments)
By Anne Kauranen and Christoph Steitz
HELSINKI/FRANKFURT, Oct 8 (Reuters) - Fortum is
set to gain control of Uniper by acquiring the stakes
of activist funds Elliott and Knight Vinke, a step
that could end a long-running deadlock over ownership between
the Finnish utility and German energy firm.
State-controlled Fortum has been seeking to control of the
German company since 2017 but Uniper's top management had
opposed a full takeover, warning it could result in a break up
and threaten Uniper's credit rating.
If approved by regulators, the agreement between Fortum and
the two activist funds would simplify the complex ownership
structure that has made resolving the stand-off difficult.
As part of the deal, Fortum would pay 29.93 euros per share
for the combined stake of more than 20.5% held by the two funds.
This equates to a price of 2.3 billion euros ($2.52 billion) and
will raise Fortum's Uniper stake to more than 70.5% from 49.99%.
Shares in Uniper fell 6.9% to 27.94 euros per share, after
details of the deal were announced. Fortum's stock rose 2.9%.
"It has been Fortum's preference to agree with Uniper on a
joint path forward, yet discussions have each time ended short
of actions," Fortum said.
"Fortum is convinced that this change in Uniper's ownership
structure as well as a resolution of the complex relationship
between all parties will return stability and put focus solely
on the business and the opportunities available to us."
The agreement still needs to be cleared by the United States
and Russia, a significant hurdle as Russian regulators have so
far capped Fortum's ownership in Uniper at 49.99% due to a
strategic water licence operated by the German firm's local
subsidiary.
Fortum said it was in discussions with the Russian
authorities and had made a preparatory filing to the Russian
Federal Antimonopoly Service (FAS), adding it expected the
transaction to close by the end of the first quarter of 2020.
"Details on this are unclear and Uniper's Russian water
business is likely to be a key area of concern where
countermeasures may be necessary, however, we think it is
unlikely that Fortum would make this move without having had
some plan in place," Bernstein analysts said.
An FAS spokesman said the regulator had been notified about
Fortum's bid to buy Uniper, without providing further details.
Uniper declined to comment.
Seeking to ease concerns at Uniper, Fortum said it would
rule out any domination agreement and profit and loss transfer
agreement with Uniper and a squeeze out for at least two years.
Credit Suisse said in a note that the deal was positive for
Fortum "as it helps resolving (the) deadlock and delivering
synergies," adding that Uniper's leverage would fall as it would
be fully consolidated.
Fortum said it would fund the deal with existing cash
resources and credit facilities underwritten by Barclays
.
($1 = 0.9111 euros)
(Additional reporting by Boleslaw Lasocki in Gdansk, Arno
Schuetze in Frankfurt, Tom Kaeckenhoff in Duesseldorf and
Anastasia Lyrchikova in Moscow; Editing by Louise Heavens and
Edmund Blair)