Activist fund Ananym pushes Siemens Energy to spin off ailing wind division

By Christoph Steitz

FRANKFURT, Dec 9 (Reuters) - U.S.-based activist investor Ananym Capital has taken a stake in German power equipment manufacturer Siemens Energy ENR1n.DE and is asking the group's management to review its loss-making wind division, its co-founder said on Tuesday.

According to Charlie Penner, a spin-off of the business, Siemens Gamesa, could raise returns for Siemens Energy's investors by as much as 60% as it would focus activities on the group's lucrative gas turbine and power grid businesses.

"We believe in wind long term. We're thinking that Siemens Gamesa can be worth $10 billion in a few years. But having it sit around and basically drag on value doesn't make any sense in our view," Penner told Reuters.

"Wind would be stronger without having to compete for investment capital with the company's higher returning businesses, and with a shareholder base fully bought in to the wind story."

SIEMENS GAMESA IS EMERGING FROM TURBINE CRISIS

Penner, the architect of a massive three-board-seat victory at Exxon Mobil XOM.N in 2021, declined to quantify the stake Ananym had taken, saying only that it was "meaningful" in the context of the firm's $300 million capital.

Siemens Energy said in a statement on Tuesday that it "values constructive input for creating sustainable value for shareholders, employees, customers and partners", and that it had addressed the development of its wind unit at a recent capital markets day.

Siemens Gamesa, which is still recovering from a quality crisis from two years ago, posted an operating loss of 1.36 billion euros ($1.58 billion) in the fiscal year ended September.

The unit's ongoing losses have repeatedly driven calls by investors to review or even sell the business, but Siemens Energy has so far committed to turning the unit around, touting the long-term prospects for wind energy overall.

"The real question would be whether (a spin-off) would trigger a closing of the discount to U.S. peer GE Vernova GEV.N," Citi analysts wrote.

Siemens Energy trades at a price-to-earnings ratio of 29.3 times, compared with GE Vernova's 51.8.

The Financial Times first reported Ananym's engagement. ($1 = 0.8587 euros)