RWE fails to dispel Calpine M&A speculation, shares extend losses
RWE would consider integrated set-up in U.S.
No comment on report about Calpine stake buy
Shares down 4.5%
Adds context in paragraph 3, CEO comment in paragraph 5, shares in paragraph 6, shareholder comment in paragraph 9
FRANKFURT, Aug 14 (Reuters) -RWE RWEG.DE shares extended losses on Wednesday after the group's management failed to dispel investor concerns about a report that the company could buy into a U.S. operator of gas-fired power plants.
Earlier this month, magazine PeakLoad reported that RWE was in advanced talks to buy a minority stake in U.S. power plant operator Calpine, causing RWE shares to fall by 7% on investor concerns over the group's capital allocation and whether such a deal would fit within its green strategy.
Analysts at Bernstein said at the time that RWE would be "losing the plot on capital discipline and ESG (environmental, social and governance) transformation" if the company were to go through with such a move.
RWE CEO Markus Krebber on Wednesday declined to comment on the report during an analyst call discussing first-half results, only saying the United States was the only core market where RWE had no integrated set-up that covers flexible generation, a term the company uses for gas capacity.
"And you know that we believe an integrated position of renewables and flexible generation can make sense. But we will definitely take our time to consider it. I think this is nothing which will happen overnight," Krebber said.
Shares in RWE were down 4.5% at 1319 GMT, at the bottom of Frankfurt's blue-chip index, after the comments.
People familiar with the matter told Reuters in May that Calpine's owners were exploring options, including a company sale, an initial public offering or a stake divestment, at a valuation for all of Calpine of about $30 billion.
RWE, which has a market capitalisation of 23.9 billion euros ($26.4 billion), plans to spend 55 billion euros by 2030 in an attempt to become one of the world's largest renewable energy groups.
"The refusal to pursue a more risk conscious investment approach on capex and M&A has had a clear negative impact on the share price, something which Mr Krebber continues to shrug off despite shareholders bearing the brunt," said Benedikt Kormaier, managing director of Enkraft Capital, which holds around 1 million RWE shares.
($1 = 0.9067 euros)
Reporting by Christoph Steitz; Editing by Miranda Murray and Emelia Sithole-Matarise
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