The renewables energy unit that Enel SpA (ENEL.MI) is planning to sell in coming weeks is valued at EUR10.5 billion in the pre-marketing phase, said a person familiar with the matter Tuesday.
The renewables energy unit that Enel SpA (ENEL.MI) is planning to sell in coming weeks is valued at EUR10.5 billion in the pre-marketing phase, said a person familiar with the matter Tuesday.

Based on the expectations of 5 billion total shares making up Enel Green Power SpA, the pre-marketing phase gives the renewables company an initial public offering price of EUR2.1 a share, said the person, who was speaking to Dow Jones Newswires on the condition of anonymity.

At a steering committee for the Enel Green Power IPO held Friday between representatives from the company and the 10 banks involved in the impending sale, the valuation range based on different methodologies varied from EUR9.5 billion to EUR12 billion, said the person.

Based on Enel Green Power having 5 billion total shares, the range is between EUR1.9 and EUR2.4 apiece.

On Monday, Enel started pre-marketing the planned EUR3 billion sale in what is expected to be Europe 's largest IPO in almost three years, other people familiar with the matter told Dow Jones Newswires.

The EUR10.5 billion figure is the initial valuation that the book runners view as most reasonable at this stage.

Enel will set the actual IPO price range in the coming weeks, said the person familiar with the matter, based on feedback from potential investors.

Enel expects the likely start date of the IPO to be Oct. 18, other people have said, subject to Italian securities regulator Consob's approval. The IPO is slated to last about a couple of weeks, they have said.

The listing is scheduled for the Milan and Madrid Bourses.

The EUR10.5 billion pre-marketing valuation is roughly in line with the market capitalization of Iberdrola Renovables SA (IBR.MC), which most analysts consider Enel Green Power's direct competitor. Enel's market value is currently worth more than EUR36 billion.

The Rome-based utility is looking to raise at least EUR3 billion from the sale of an unspecified minority stake in its renewables unit.

At EUR3 billion, the IPO would be the largest since Span's Iberdrola SA (IBE.MC) raised EUR4.1 billion from the flotation of renewables unit Iberdrola Renovables in December 2007. The closely-watched sale will be monitored as a measure of investors' appetite for new listings.

The Enel Green Power sale is part of Enel's efforts to slash net debt to EUR45 billion by the end of December from the EUR50.87 billion of the end of 2009.

The IPO global coordinators are Mediobanca SpA (MB.MI), Intesa Sanpaolo SpA (ISP.MI), Credit Suisse Group (CS) and Goldman Sachs Group Inc. (GS).

Book runners are UniCredit SpA (UCG.MI), J.P. Morgan Chase & Co. (JPM), Morgan Stanley (MS), Barclays PLC (BCS), Bank of America Corp.'s (BAC) Merrill Lynch and Banco Bilbao Vizcaya Argentaria SA (BBVA).

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