Novera Energy, which generates electricity from landfill gas, has received an approach that could lead to an offer at 90p a share, believed to be from 3i.The potential bid from the private equity group is 44 per cent above the closing price on Thursday night and would value the company's equity at £112m.
The approach reflects increasing interest in the profitability and growth potential of renewable energy, especially wind power, which is the focus of Novera's expansion plans. Landfill gas is a relatively mature market.
Novera said that it was prompted to reveal the approach, with the consent of the potential bidder, by the recent rise in its share price, which gained 7 per cent on Wednesday and 2 per cent on Thusday.
The shares closed on Friday at 79p, up 26 per cent, having drifted down from 75p to 55p in the second half of last year.
Speculation on Friday centred on 3i Infrastructure as the most likely possible bidder. 3i said in 2005 that it was seeking more investments in renewable energy, and Novera is the largest independent quoted company of its type in the UK. 3i refused to comment last night.
Infinis, a similar landfill gas company that is expanding in wind power, is owned by Terra Firma, another private equity group.
Novera has 58 sites, of which 46 are landfill gas and just one wind, generating a total of 122mw, but its target is to get to 250mw of wind power by 2011.
A note from Oriel Securities, the company's broker, last month suggested a "risked upside valuation" of 117p a share and a core value of about 80p.
Interest in wind power from investors and utilities is driven by the UK's Renewables Obligation, one of the most generous subsidies in Europe for renewable energy, and the European Union's target that by 2020, 20 per cent of all the EU's energy - and by implication, about 35 per cent of its electricity - should come from renewable sources.
Ian Simm, the chief executive of Impax, a specialist investor in the environmental sector, said that values of wind assets had fallen by about 25 per cent since last summer, making them more attractive investments.
"With the European Union's renewable directive taking effect between now and 2020, people investing in renewable energy assets right now ought to be quite well positioned," he added.
Source: Yahoo| By Ed Crooks
No comments:
Post a Comment