Energy, Energy Market, Estonia, Good for Business, Mergers and take-overs

Sven Papp, managing partner at the law office Ellex Raidla that has advised several takeover deals, confirmed that there has been talk about acquisition of Utilitas indeed and the talk rather has become more intense of late. Papp, who represents a party potentially interested in acquisition, said that more than one potential buyer has demonstrated their interest.

It is mostly foreign private equity funds that have demonstrated their interest towards Utilitas.

"The kind of infrastructure companies like Utilitas are not up for sale every day. Therefore we've definitely got parties that have interest," Papp said.

Papp estimated that if Utilitas were to be sold as a whole, its price would be in the same range as that of the renewable energy company Nelja Energia. "I do not know about Utilitas' loan burden, but the value of the company should be under 500 mln [euros], rather under 400 mln even," Papp said.

Kristjan Rahu, who holds 87% of the shares in Utilitas, said that he is not planning on yielding control of the company. Rahu said that many foreign banks and funds have approached the company over the past 1.5 years with a wish to buy.

"The market situation apparently is such that there's very big interest in infrastructure companies like us now," Rahu said. He stressed that no official auction or procedure towards a sell-off has been started.

"And if we were to do it, we would be talking about involving a financial partner alone, not selling 100% of the company. Utilitas is an Estonian company managed by Estonians. Giving away the company is definitely not on our minds. We won't even talk about it," he added.