Bagnall Energy Limited has agreed to acquire Downing Renewables & Infrastructure Trust PLC (LSE:DORE) in a recommended cash deal valued at around £174.55 million.
Sector consolidation and take-out deals such as this have been long anticipated in the renewables sector, with discounts to net asset value at historic highs. The DORE deal could be the first of several, analysts reckon.
Under the terms, each DORE shareholder will receive 102.6p in cash for every share they hold, representing a premium of around 24% compared with DORE’s closing share price on 19 June.
While the offer price is about 7.5% below DORE’s net asset value, the underlying value of its renewable energy assets as of 31 March, shareholders will still benefit from upcoming dividends, including a quarterly payment expected later this month and a potential special dividend if the deal concludes after August.
Bagnall already owns just over 25% of DORE and intends to take full control, believing that the trust will perform better as a private entity.
The company has a longstanding presence in renewable energy, managing a large portfolio of solar, wind, hydropower, and battery storage assets across the UK and Northern Europe.