German utilities giant RWE AG (RWE.XE) said Wednesday it will act in concert with German bank WestLB AG to raise its stake in Hungarian power distributor Budapest Elektromos Muvek Nyrt. (ELMU.BU), or Elmu.
WestLB doesn't intend to hold any Elmu stake acquired in this way in the long term, RWE said in a filing with the Budapest Stock Exchange, adding that it and the bank plan to conclude all put and call option agreements for such shares.
RWE and WestLB's cooperation arrangements will be transitional and will last until the settlement of all of these options, RWE added.
RWE (RWE.XE) holds a 55.3% stake in Elmu, with German utility Energie Baden-Wuerttemberg AG (EBK.XE) holding a further 27.3% and the city of Budapest holding 10.5%. The city of Budapest is in the process of seeking a buyer for its stake.
If RWE and WestLB gain a large enough interest in Elmu to legally oblige them to make a public purchase offer for all of the company's remaining shares, RWE would make such an offer itself, the German firm said.