Octopus Renewables Infrastructure Trust has today announced it intends to merge with Aquila European Renewables as the renewable energy investment trust looks to improve its appeal to investors.
However, the buyer said it has tried to engage with Aquila several times over the past year, but the target ignored its approaches. As a result, Octopus said it was forced to go directly to Aquila’s major shareholders, who’ve given their approval to the deal, although Aquila’s board is yet to engage.
Octopus Renewables said there’s now “compelling logic” to create one of the largest renewable energy investment trusts by merging with Aquila. The deal would create a giant with a “diversified portfolio of European renewable energy assets,” and a gross asset value of £1.6bn.
Although no firm agreement has yet been signed, Octopus believes the rationale for a merger is compelling as both trusts trade at a significant discount to net asset value (NAV). As of 21 December 2023, Octopus’s shares traded at a 16.3 per cent discount to its last reported NAV and Aquila’s shares traded at a 29.3 per cent discount to its last reported NAV.
If an agreement is reached between the two parties, Octopus said the deal would constitute “the voluntary liquidation of Aquila and the rollover of its assets into Octopus in exchange for the issue of new shares of Octopus to holders of Aquila shares.”
The enlarged company would be managed by Octopus Energy Generation and its specialist renewable energy fund management team of over 120 professionals. It would also have access to a significant pipeline of projects sourced by Octopus Energy Generation.
