British renewable energy company Novera Energy has rejected a cash offer from private-equity backed peer and shareholder Infinis Energy, valuing it at £90.5m.
Novera, which operates landfill gas sites, hydro power stations and wind farms, said the offer from Terra Firma-backed Infinis of 62.5 pence per share “significantly undervalues” the company.
This is the second time in 18 months that Novera has been faced with a bid from Infinis after the private equity-backed company last year entered a takeover battle with 3i Infrastructure Fund for the company.
At that time, Infinis bought up stock in Novera at 90 pence per share, but the battle ended in June with neither party making a formal offer.
Analyst Andrew Shepherd-Barron at KBC Peel Hunt said he believed Infinis’ bid needed to be above 80 pence per share to reflect Novera’s assets and development pipeline.
Alongside its current assets with generation capacity of 148 megawatts, Novera also has permission for wind farms with capacity of 85 MW and a further 55 MW of wind farms in the planning stage.
Infinis Energy, one of the UK’s largest generators of renewable energy with with 313 MW of installed capacity, made the bid after buying a further 18.9 million Novera shares from Credit Suisse on Tuesday, taking its holding to 61.8 million shares, or 42.6% of Novera.
The offer price represents a premium of 30% to Novera’s closing middle market price of 48.3 pence per share on Tuesday.
“Investors have to take a long-term view on Novera’s future, which is good, and the short-term attractiveness of cash,” said KBC’s Shepherd-Barron, who has a “Buy” recommendation and an increased target price of 82 pence on the stock.
Infinis is being advised on the offer by BofA Merrill Lynch. (Editing by Paul Sandle; Editing by Hans Peters)