DONG Energy was born in the bosom of the Danish State. During a bout of liberalisation of the Danish energy market DONG went on to become Denmark’s biggest energy provider. DONG is also one of the biggest energy companies in Northern Europe. Relative to its other large European rivals however, DONG is a minnow. DONG leads the production of offshore wind energy and DONG’s strategic direction is to replace fossil fuel sources of energy with green alternatives a so called “green turnaround”. This turnaround is financed by guaranteed prices and minimum tariffs mandated by the government. This makes the income reliable so long as market forces are not allowed to meddle. DONG had been rapidly expanding its offshore wind capacity when after the fiscal year 2012 it was clear that if DONG was to fulfil its investment plans then a capital infusion would be necessary. New Energy Investment, a capital fund managed by Goldman Sachs, was chosen to be the primary investor. Along with some Danish pension funds, Goldman Sachs struck the deal with the Danish state that DONG was valued at DKK 31,5 billion. Furthermore, Goldman was given extraordinary rights regarding the composition of the board and a veto on the board. Plenty of influence for being just shy of an 18% stake. Add on the side deal with the Danish state that Goldman was given put option on 60% of it investment to sell back to the state at a the original price and a risk free premium if the IPO failed. This paper refutes the valuation of DKK 31,5 billion pr. 31.12.2013 as far too low. Furthermore this paper expects that when the IPO, planned for June 2016 but no later than Q1 2017, kicks off, the capital infusers will be very well paid for their investment.
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