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Octopus Renewables Infrastructure Trust plc (LON:ORIT) disclosed today that it has made a merger proposal to Aquila European Renewables plc (LON:AERS) in a push to create one of the largest London-listed diversified renewable energy investment trusts.
The proposed tie-up is aimed at increased geographic diversification, with almost no overlap between the two companies, greater technological diversification, and providing opportunities to extend ORIT’s current capital recycling programme, among other merits.
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The enlarged entity is expected to have a combined market capitalisation of about GBP 745 million (USD 945.9m/EUR 859.3m), based on December 21 closing prices. It will have a portfolio of European renewable energy assets, including wind, solar, hydro, green hydrogen and battery storage, with a combined net asset value of nearly GBP 1 billion.
ORIT said it started its pursuit of AERS earlier this year, seeking unsuccessfully to engage with the target company on several occasions. After gaining support from a number of AERS shareholders, it again contacted the target company’s board and now looks forward to further expected interaction over the coming weeks.
ORIT further highlighted in the statement that there can be no certainty that engagement will progress and a final agreement will be reached.
AERS separately confirmed it has received unsolicited proposals from ORIT about a possible combination. It added that its board will consider the proposal as part of a wider assessment process early in the New Year.
AERS, which is advised by Aquila Capital Investmentgesellschaft mbH, invests in wind, solar PV and hydropower projects.
Earlier in December, the company announced that its board will continue to explore different initiatives to help address the issues facing the sector and ensure that the real value of its portfolio is reflected in the company’s share price. These initiatives may include, among others, a possible combination with another listed investment company.
(GBP 1 = USD 1.269/EUR 1.153)
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