Deutsche Bank ups Verbund as concerns over potential windfall tax ease

VERBUND AG

26/05/2022 08:33

** Deutsche Bank upgrades Verbund  VERB.VI  to "buy" from
"hold" saying the concerns over an Austrian windfall tax have
been materially reduced
    ** The broker notes the Austrian hydropower producer's share
price has remained in the range of EUR 85-100 since August 2021,
whereas medium-term German power prices rose by about 180% at
the same time
    ** DB points to investors' fear of a windfall tax threat on
companies with state participation to explain Verbund's share
price; the Austrian government holds a 51% stake in Verbund
    ** "The best outcome for minority shareholders would be if a
special dividend were to be considered an acceptable outcome by
the Austrian authorities," DB says
    ** It adds this path would allow for the Austrian government
to use Verbund's dividends to help those affected by the energy
crisis, while protecting private investment sentiment
    ** Verbund on Wednesday said it would propose a special
dividend of EUR 400 mln ($426.76 mln), lifting the total
dividend for FY 2022 to around EUR 1.2 bln  urn:newsml:reuters.com:*:nASM000D8V
    ** Earlier in May, its shares dropped by 10% after Austrian
Chancellor Karl Nehammer's said new regulation on windfall
profits for companies with state participation was needed
 urn:newsml:reuters.com:*:nL5N2WX3VS
    ** Out of 14 analysts that cover Verbund, ​one rates the
stock "buy", ​​six "hold" and seven​ "strong sell" or "sell"

($1 = 0.9373 euros)

 (Reporting by Tristan Chabba)
 ((Tristan.chabba@thomsonreuters.com))