Friday, June 15, 2007

RAG Says Ministers Chose Share Sale Over Cerberus Bid (Update1)

FORBES | By Thom Rose

June 15 (Bloomberg) -- RAG AG, Germany's biggest coal miner, said government ministers chose a share sale over bids of as much as 8 billion euros ($10.7 billion) from Cerberus Capital Management LP for the company's property, energy and chemicals units.

The offers from Cerberus ranged from 6 billion euros to 8 billion euros, Barbara Mueller, a spokeswoman for RAG, said today by telephone. Ministers have chosen to continue with the planned share sale instead, she said.

RAG needed government approval to sell shares of its non- coal businesses and ministers are debating the future of the German coal industry, including RAG. Should the share sale be completed, they'll need to create a foundation to handle the continuing costs of RAG's unprofitable coal unit.

``We know from the coal talks that the various federal ministers were aware of such offers in the range of 6 billion euros to 8 billion euros from Cerberus,'' Mueller said. ``The choice to approve the share sale for the integrated company was made in light of this knowledge.''

RAG owns Dusseldorf, Germany-based Degussa GmbH, the world's largest specialty chemical maker. RAG's owners include E.ON AG, RWE AG and ThyssenKrupp AG.

RAG agreed last year to sell its coal-mine equipment maker DBT GmbH to Bucyrus International Inc. as it prepares to shift away from mining. The company plans to list a combination of Degussa, the Steag AG energy unit and its real-estate assets.

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