Aquila calls off merger talks with Octopus Renewables
By Benjamin Chiou
Date: Friday 10 May 2024
(Sharecast News) - Merger talks between Octopus Renewables Infrastructure Trust (ORIT), the clean energy investment fund of Octopus Energy Group, and smaller peer Aquila European Renewables (AERI) have been called off after AERI rebuffed an indicative offer.
ORIT and AERI had confirmed speculation in December that they were exploring a possible "combination", which would have created a combined entity worth £745m at market prices at the time.
AERI then said in February that it had started a process of "mutual due diligence with multiple interested parties", considering a so-called section 110 scheme of reconstruction under the Insolvency Act 1986, which can be used to demerge an investment business.
However, in a statement on Friday, AERI said after receiving three indicative non-binding proposals from ORIT and two other investment companies, all offers implied either just a small premium or a discount to the current AERI share price.
Following the release of its annual results last month, AERI said it also received feedback from shareholders representing more than 25% of total voting rights that they were not supportive of a section 110 combination with another listed investment company.
"Alongside the shareholder feedback, the board has taken into account the discount to NAV that the listed investment company renewables sector is currently trading on and believes that at this time, a section 110 combination with another listed investment company is not value enhancing when weighed against the other potential options open to the company," AERI said.
AERI said it is continuing to look at other options, including a possible wind-down of the company, a potential sale of some or all assets, or a continuation of the company in its present form.
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