Licence to print losses

5 May 2004

The utility is attempting to flog fully half the printing machinery maker’s capital in as little as two days. But can the bookrunning banks achieve that without the share price tanking?

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RWE, the German utility, put its 50% stake in the printing machinery maker HeidelbergerDruck up for sale on Wednesday, via a combination of a share offering and an exchangeable bond.

The utility is offering 30m shares in the placement worth E810m at current market prices. The size of the convertible bond will be capped at E525m. The bond offers a zero coupon and is exchangeable for stock at a 35% premium to the placement price.

Heidelberger's share price fell by as much as 11% in midmorning dealings on Wednesday as investors digested the size of the deal. The average daily trading volume in the stock has been E3m. However, its free float will rise to 72% on a fullydiluted basis assuming all the shares are sold.

Dresdner Kleinwort Wasserstein and JPMorgan are joint bookrunners.

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