Octopus reveals year-long merger pursuit of fellow renewables fund
Aquila European Renewables has so far proved too slippery even for ambitious UK group
Octopus Renewables has revealed details of its year-long pursuit of a merger with a fellow UK green energy investment fund, including direct approaches to shareholders, as it tries to force through a deal.
Octopus announced today (Friday) that it has this year made several failed approaches to the board of London-listed Aquila European Renewables (AERI).
There was “no material engagement from” AERI concerning approaches made in March and May, said Octopus.
AERI has “delayed a substantive response” to its most recent approach in November until next year.
Undeterred, Octopus said that the “strong rationale” for the merger led it to directly approach AERI shareholders, “receiving support” for the boards of the two renewables funds to enter substantive discussions concerning the merger.
Since then, Octopus has once again contacted the AERI board to "progress discussions” and said it “looks forward to further expected interaction over the coming weeks.”
AERI responded today confirming that it has “received unsolicited proposals” from Octopus concerning a merger.
AERI said it is exploring how to best secure recognition of the “real underlying value” of its portfolio and would consider the latest Octopus approach “as part of this wider process” early next year.
Octopus says the merger would create one of the largest London-listed diversified renewable energy investment trusts.
The merger would see a further diversified portfolio of European renewable energy assets, said Octopus, with a combined portfolio net asset value of almost £1bn ($1.27bn) and gross asset value of £1.6bn.
Octopus said that the gross asset values of itself and AERI as of 30 September were £1.1bn and €587m respectively.
It said the two funds have “complementary portfolios offering increased geographic diversification, with almost no overlap between the two.”
Octopus has numerous green assets in the UK and France in particular. AERI has none in those countries, focusing its attention on Portugal, Spain and the Nordics.
It would also result in technological diversification, with the combined portfolio including onshore wind, offshore wind, solar PV, hydro, green hydrogen and battery storage.