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FRANKFURT—RWE AG's renewable energy unit Innogy SE said shares worth up to about €5 billion ($5.6 billion) would be offered in its initial public offering, valuing the German utility's subsidiary at up to €20 billion.

Innogy said late Thursday it would sell 55.6 million shares priced between €32 and €36 each to increase its capital by roughly 10%. RWE will offer shares equivalent to a 8.2% stake in Innogy from its own holdings, plus an 1.8% stake in an overallotment option. RWE could offer more shares in the event of strong demand, meaning RWE and Innogy could together sell a stake of up to about 25%.

BlackRock Inc. has ordered shares worth €940 million for funds that it manages, Innogy said .

RWE last year unveiled plans to spin off its renewables, retail and power-grid operations in response to a shift toward renewable energy that has eroded profitability. Like other utilities in Germany and elsewhere in Europe, RWE has been hurt by low wholesale electricity prices partly due to the power glut that has resulted from a rise in renewables. In Germany, uncertainty surrounding liabilities connected to the country's exit from nuclear power has also weighed on operators.

Innogy plans to list on the prime standard segment of the Frankfurt Stock Exchange. It didn't provide a firm date for the listing, though it is expected in October. The offer price will be set on the basis of a bookbuilding process expected to last about two weeks.

Write to Friedrich Geiger at friedrich.geiger@wsj.com

(END) Dow Jones Newswires

September 23, 2016 05:05 ET (09:05 GMT)

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