Renewable Energy

Veolia – victim or villain?

2 Mar 2006

Did the French water group pull out of its joint bid with Italy s Enel for French utility Suez because it was nobbled? Or was it offered something juicy in return?

Bouygues stock looks pricey

23 Nov 2005

Shares in the French conglomerate have risen by a third since June on hopes that it will sell its prize mobile telecoms unit. But a sale looks unlikely while Telefonica remains sidelined. And Bouygues appetite for acquisitions may resurrect its historic discount.

RWE right to consider E15bn water spin-off

25 Oct 2005

A float would easily attract outside investors, and would give greater transparency to the value of the German utility s water assets. That would be a welcome strategic shift for RWE. But unless it can convince otherwise, it should return the proceeds to shareholders.

Utilities stocks start to crumble

22 Feb 2005

A more convincing explanation is the sector s unwarranted premium to the market. Yesterday s 3% fall in European utilities stocks has been widely blamed on the threat of higher longterm interest rates.

Is Electrabel the cheapest European utility?

14 Dec 2004

The conventional wisdom is that the Belgian utility is too expensive for parent company Suez to consider buying out minority shareholders. But make a few sensible adjustments, and Electrabel looks dead cheap.

Vivendi Universal sells 15% of Veolia

9 Dec 2004

The deal has been cleverly structured to preempt an overhang of stock when options over the shareholding expire later this month. VU will make a big capital gain that can be offset against tax losses. This will cut pressure on it to make more disposals for tax reasons.

UK power may be better bet than water

30 Nov 2004

Although the regulators seem to be allowing a higher return to water companies than power distributors, that s not the whole story. Water companies actually have higher hurdles to leap to hit their performance targets. So any generosity could turn out to be illusory.

Bouygues reaches watershed

15 Nov 2004

The French conglomerate has sold its water business for E1bn. That is a wise move. Yet Bouygues faces little pressure to break up its ungainly business structure. This doesn't mean it shouldn't.

Scottish Power bodes ill for European utilities

10 Nov 2004

Utilities are trading at a premium to the broad market yet utilities are a mature business. This makes no sense. Scottish Power s problems ram home growth risks. Either utilities are overpriced or European markets are cheap.

Northumbrian results stick it to private equity

9 Jun 2004

The UK water company slipped through CVC s hands when a public group bought the company and immediately floated it. One year on, its shares have risen 35% and paid out 8% on the float price including the final dividend. Sometimes greed doesn t pay.

UK water companies near regulatory showdown

7 Jun 2004

But while it may be lenient on returns, the regulator might crack down on capital structures and efficiency. Investors should be wary. The last fiveyear regulatory review caused water stocks to collapse. The regulator has hinted that this one will be easier.

Private equity look for quick exits

21 May 2004

The likes of CVC and, reportedly, Blackstone are pushing out big IPOs, regardless of choppy markets. That's partly because they bought assets on the cheap. But it's hard to shake fears that the smart money doesn't trust the recovery.

Guy Hands makes £1bn approach for Pennon

17 May 2004

This isn't really about water, but who gets to consolidate the UK waste management industry. Hands wants to break up a potential deal between Pennon and a rival. This is a clever move, but it is too early to say if it will pay off.

Italian minorities dealt another blow

6 May 2004

This time, it is not a private investor that s putting the screws on minority shareholders. The culprit is Milan s local government. If public authorities set such bad examples, what hope is there for Italy to clean its act up?

Spain opens the door for energy M&A

18 Mar 2004

There are signs that the new government will smile on deals in the energy sector, such as a Gas Natural takeover of an electricity company. The interesting question is how the government would react if this triggered interest by foreigners.

Veolia comes down to earth

8 Mar 2004

The French utilities conglomerate s goals look easily achievable. This is welcome news considering its overreaching past. But Veolia s shareholders shouldn't get too excited. The 40% of shares owned by banks and Vivendi will continue to depress the shares.

Suez should break itself up

18 Nov 2003

Or at least that is what chief executive Gerard Mestrallet should do next if he really wants to boost shareholder value. The only problem is that it s not clear that Mestrallet is prepared to assetstrip the company that he built.

Veolia follows Suez with US cleanup

24 Sep 2003

The French water group is removing the noncore bits of its US Filter arm to cut debt by E2bn. Veolia is streamlining its earlier acquisition binge rather than repudiating it, like former parent Vivendi did. Shareholders like the idea.

Suez needs to sharpen its strategy

5 Sep 2003

The financial firefight is over. In just nine months, Suez has sold E10bn of assets, and hit debt targets way ahead of schedule. But a sumofparts valuation shows how much work could still be done. The group is penalised by a large conglomerate discount.

Suez to sell US water unit for $4bn – reports

3 Sep 2003

The French utility is getting serious about its debt reduction plans. Suez has already sold some E6bn of assets this year. This drastic kill or cure approach to underperforming assets is defensive, however. Suez still needs to show it can grow profitability.