Novera is currently the target of a hostile takeover bid from Infinis, a landfill gas operator backed by UK private-equity firm Terra Firma that wants to get into the wind-energy business.
Infinis, which already owns 42.6% of Novera, launched its bid on 7 October by offering £0.63 ($1.03) for each outstanding share. Novera shares rocketed as a result of the offer, and are currently trading at £0.67.
On 26 October Novera responded by publishing a circular for its shareholders explaining why its board believes Infinis’ offer is “cheap and opportunistic” and significantly undervalues the company.
The lynchpin of Novera's argument is that there is a scarcity of publicly traded pure-play renewables companies in the UK, despite investors' rising interest in the sector. Novera claims there are only other listed companies in the UK exclusively dedicated to renewables: Renewable Energy Generation, Greenko Group, Helius Energy and REH.
In the circular, Novera attempted to downplay the significance of the four other companies, remarking that REH is “in the process of selling off all assets and embarked on a programme of returning capital to shareholders in early 2009”.
However, REH responded by slamming Novera’s comments as being “entirely erroneous”, adding that “anyone reading the Novera circular should ignore this statement”.
“REH continues to operate its wind and methane assets and to develop its pipeline in UK and Europe,” the company says. “The board is currently assessing potential actions, if any, which the company can take in relation to the errors.”
Infinis’ initial takeover offer for Novera expired on 2 November, having only picked up an additional 0.1% of Novera’s outstanding shares. It needs at least 50% in order to take control of Novera's board. In response, Infinis on 3 November extended its offer until 16 November.
