Shares in NextEnergy Solar Fund Ltd (LSE:NESF, FRA:5NE), the London-listed investment company that owns solar power plants in the UK and Portugal, rose 4% after it announced a formal sale process and invited offers for the whole of the business.
The move follows a strategic review whose results were announced in March and marks the most decisive step yet by a board that has struggled to close a persistent gap between its share price and the value of its assets.
The company said its shares had traded at a discount to net asset value for several years, damaging its ability to raise fresh equity to fund growth.
Net asset value, the accounting measure of what a fund's holdings are worth per share, is the yardstick against which listed infrastructure funds are typically judged.
The board also blamed a mismatch between its own long-dated investments and what it described as the shorter-term horizons of some parts of the public equity market.
A formal sale process is a mechanism under the Takeover Code that allows a company to solicit bids openly while shielding bidders from some of the usual disclosure requirements.
The Takeover Panel has granted a dispensation, meaning interested parties will not have to be publicly named and will not face the normal 28-day deadline to declare their intentions while they remain in the process.
The board said it was not in talks with any potential buyer and had received no approach as of the announcement.
Rothschild & Co is advising on the process, and interested parties will be required to sign non-disclosure and standstill agreements on materially identical terms before gaining access to information on the business.
NextEnergy Capital IM, the fund's investment manager, supports the decision.
The company said it intended to focus the process on parties that understand the full potential of the business, and would update the market on timings in due course.
An offer period has now formally begun, triggering disclosure obligations under Rule 8 of the code.
The board has reserved the right to change or abandon the process at any point, and there is no certainty that any offer will emerge.
Shareholders have been told to take no action.
---ADDS SHARE PRICE MOVEMENT---
