By Stephen Jewkes and Christoph Steitz
MILAN/FRANKFURT (Reuters) - The sale of the Italian assets of German energy group E.ON (DE:EONGn) has hit another hurdle, with the deadline for binding offers pushed back to late November, four sources familiar with the matter said.
Germany's biggest utility, which is seeking to offload its Italian businesses to cut debt, had originally planned to complete the deal in the second quarter of this year, according to presentation slides obtained by Reuters, but Europe's depressed power market has prompted a series of delays.
"Binding offers which had been due early November are now expected by November 24," one of the sources said.
A second source confirmed the day, saying the delay was due to the complexity of the deal.
E.ON declined to comment.
Having completed a 20 billion euro (15.8 billion British pounds)asset disposal programme last year, E.ON is still looking for opportunities to divest businesses, currently planning to sell its units in Italy and Spain to help lower a 29.7 billion euro debt pile.
E.ON Italia, Italy's No. 4 electricity provider, has assets that include 6 gigawatts of generation capacity, a stake in a liquefied natural gas (LNG) terminal as well as gas and power sales activities.
Sources have said the assets could be worth between 2 billion and 3 billion euros.
While E.ON's power and gas clients have attracted interest, most of the generation assets have found only lukewarm interest as Italy's ongoing economic crisis continues to undermine demand and depress prices.
"If you look at the ECB stress test results it certainly doesn't create the environment needed to pull off such a transaction," one of the sources added, saying the outcome could undermine investor confidence in the country.
Italian banks fared poorly in the pan-European review of the sector which was unveiled on Sunday.
ASSET BUNDLING
Two sources said no bid for all of E.ON's Italian assets had as yet been tabled.
People close to the matter in September said Edison, the Italian power company controlled by France's EDF (PA:EDF), was set to enter private talks to buy all of E.ON's Italian assets, though a source inside the company said earlier this month it was "early days".
"The process has been delayed, there's no bidding for all of E.ON Italian assets," one of the sources said, adding the German group was inclining more towards selling the unit in bundles.
A second source confirmed no offer had yet come in for the whole of E.ON Italia.
"(Italian utility) Enel is very interested in the downstream gas and power client base and is very aggressive. A likely solution could be Enel gets the clients and Edison the rest," a third source said.
Edison was not immediately available for a comment.
Italy's biggest utility Enel (MI:ENEI) has previously expressed an interest in some of the assets, without specifying which ones, while regional utility Hera (MI:HRA) is looking at E.ON's gas and power sales portfolio.
People familiar with the matter said A2A (MI:A2) had shown early interest in E.ON's prized hydroelectric plant in Terni in central Italy as well as its client base, while small energy sales company Gala was eying the coal plant in Sardinia.
A2A declined to comment while Gala was not immediately available for a comment.
France's GDF Suez (PA:GSZ) had expressed an interest in some of the E.ON assets but earlier this month a source close to the matter said it has decided to withdraw.
(Additional reporting by Giancarlo Navach in Milan and Arno Schuetze in Frankfurt; Editing by Mark Potter)