Infinis Energy is set to be taken back into private hands after its share prices halved due to the decrease in energy prices and Government subsidy cuts.
Monterey Capital II S.à r.l., a unit of Terra Firma, already owns 68.5% of Infinis and their offer valued the company at £555 million, a premium of around 40 per cent on the share price at the time the offer was announced.
Guy Hands, Founder and Chairman of Terra Firma Capital Partners, said: “We believe that this transaction offers Infinis’ shareholders an attractive cash consideration for their shares in Infinis and allows Terra Firma to pursue alternative options to monetise its investment in Infinis once it is a private company.
“We are pleased that the Infinis independent directors have unanimously recommended the transaction and are grateful to the Infinis board and management team for their support, in particular as we have jointly completed the preparations for the offer announced today.
“Since the initial public offering of Infinis two years ago, our management and employees have delivered what was promised in terms of both operational performance and the development of the business, with 135 megawatts of new wind capacity in construction.
“However, the challenging regulatory and political environment and the reduction in power prices in the last two years have adversely affected both the cash generation and the growth prospects of the business.
“Accordingly, the Infinis independent directors have been actively exploring ways to maximise value and have looked at offers for the whole business as well as selling the assets separately. Following this work, the Infinis independent directors firmly believe that the offer from Monterey represents the best combination of risk and return for shareholders.”
Ian Marchant, Chairman, Infinis Energy, blamed “a bad bet on the power prices” as the biggest factor contributing to the fall of Infinis’s share price. However he said that a prolonged winter could “double” current prices.
Marchant said: “There’s one thing that could push them up, which is the very tight capacity margin. And if we get a cold winter, we will see a spike in power prices.”