November 18, 2019 / 1:46 PM / a month ago

PNE investor ENKRAFT calls for audit of MS fund's bid process

FRANKFURT, Nov 18 (Reuters) - PNE AG shareholder ENKRAFT has called for a special audit of a takeover bid for the German wind project firm from a fund controlled by Morgan Stanley, an investor letter showed.

ENKRAFT, which holds more than 2.9% in PNE, opposes the deal, arguing it significantly undervalues the company and is critical of management for failing to launch a proper sale process to increase value.

Morgan Stanley Infrastructure Partners (MSIP) has bid 4.00 euros per PNE share, valuing the firm at 306 million euros.

PNE's supervisory and management boards have recently endorsed the offer.

ENKRAFT has said a fair offer would be 6.90-7.10 euros per share, or 544 million euros, and has criticised PNE management for agreeing to delist the company should more than half its shareholders accept the offer.

"The audacity with which the management board appears to disregard its obligations to PNE shareholders in favour of MSIP is shocking and probably unprecedented in Germany," ENKRAFT said in a letter to the company seen by Reuters.

"Due to the inaction of the management and supervisory boards to comment on the issues that were raised, a first step will be a special audit, to be resolved by the annual general meeting, aimed at the events surrounding the takeover bid."

The group's next ordinary annual general meeting is scheduled for May 20, 2020.

ENKRAFT's comments come a week after PNE said that Active Ownership Capital, the firm's No.3 shareholder with a 5.07% stake, did not plan to accept the bid, in a sign that resistance against the MSIP bid is building.

PNE, whose shares were down 0.3% at 3.99 euros apiece, was not immediately available for comment. (Reporting by Christoph Steitz; editing by Jason Neely)

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