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Bluefield Solar Income Fund Ltd on Monday said it had agreed to a £548 million cash offer from Drax Group PLC, which implies an enterprise value of £1.08 billion. The solar-power focused investment firm has received a bid from Drax Smart Generation Holdco Ltd, which is wholly-owned by Selby, North Yorkshire-based electricity generator Drax. Both firms are members of the FTSE250 index. Bluefield shares jumped 16% to 91.20 pence on Monday morning in London, giving it a market capitalisation of £540.1 million. Drax rose 1.0% to 799.00p for a £2.69 billion market cap. Drax’s offer sees Bluefield investors receiving 92.57p in cash for each share held, in addition to keeping the second interim dividend of 2.25p per share, which is payable on or around June 15. The cash offer values Bluefield at about £548 million in total, and is 28% higher than Bluefield’s closing share price of 72.20p on November 4, the day before the offer period began. Including the dividend, Bluefield investors will be entitled to 94.82p per share, which values the company at £561 million in total, and is 31% ahead of the November 4 closing share price. However, it is about 9% below Bluefield’s net asset value of 104.52p per share as of May 14. The acquisition terms give Bluefield an enterprise value in the region of £1.08 billion. At the end of December, Bluefield’s total assets amounted to £639 million. ‘Combining BSIF’s portfolio with Drax’s existing flexible generation assets, alongside Drax’s marketing and trading capabilities, will create a broader renewables platform,’ Drax explained. Drax sees the purchase supporting growth in the UK renewables market, complementing its existing assets and facilitating £2 billion in incremental investment which Drax has planned for ‘flexible’ energy between 2025 and 2031. Bluefield generated earnings before interest, tax, depreciation and amortisation of about £130 million in financial 2025, Drax noted, and has the potential ‘to grow Drax’s Ebitda from renewables, offering greater predictability and visibility of cash flows from a large operational portfolio’. This will reduce Drax’s earnings risk from grid connection delays, Drax added. It expects return on investment capital from the acquisition to ‘significantly exceed’ Drax’s target weighted averaged cost of capital. For their part, Bluefield’s directors plan to unanimously recommend the deal to shareholders, who will vote on the matter at a general meeting, where 75% approval is required for it to proceed. Bluefield directors with a combined 0.03% stake in the company have committed to vote in favour of the acquisition. Michael Gibbons, Bluefield’s chair, hailed Bluefield, which went public in 2013, as ‘a pioneer in creating the first UK-listed investment trust focused primarily on UK solar energy infrastructure’ and praised the company’s investment adviser Bluefield Partners for its role in the company’s evolution. However, Gibbons explained that Bluefield had launched a formal sale process due to its shares trading at a discount in recent years, which Gibbons attributed to ‘a changed interest rate environment’ since 2022. has contributed to BSIF Shares trading at a consistent double digit discount to NAV. Acquisition by Drax ‘represents a highly attractive outcome for BSIF Shareholders and a compelling opportunity to crystalise value in cash,’ Gibbons added. Drax Chief Executive Will Gardiner, CEO of Drax added: ‘BSIF could potentially be the biggest acquisition our business has ever made. It represents an attractive opportunity to substantially grow our renewable generation business, while being highly complementary to the wider Drax Group’s existing operations and FlexGen portfolio. This deal can help meet the UK’s energy goals of security of supply, affordability and decarbonisation as rising levels of renewable electricity are expected to meet growing national power demand. Gardiner also noted: ’There is no change to our capital allocation policy as a result of the potential transaction. We remain committed to our balance sheet targets, including returns to shareholders.‘ Copyright 2026 Alliance News Ltd. All Rights Reserved.
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