Energy Assets shareholders threaten £198m deal

A group of shareholders who control 22.6% of Livingston-based industrial smart metering firm Energy Assets Group said on Wednesday they would vote against a £198 million takeover deal unless Energy Assets published financial results for the year to March 2016 or a comrehensive trading update.

The shareholders are Oakcliff Capital Partners, SF Metropolis Valuefund, Investmentaktiengesellschaft fϋr langfristige Investoren TGV, Forest Manor N.V. and Bryan R. Lawrence.

On April 18, Energy Assets said it agreed to be acquired by funds controlled by US infrastructure asset manager Alinda Capital Partners for about £198 million.

Uncer the deal, Alinda would pay 685p per share to acquire Energy Assets, a roughly 40% premium to its closing price on the previous trading day.

Energy Assets shares closed on Wednesday up 1.53% at 695p.

In a joint statement, the shareholders said: “We are all long-term investors in Energy Assets.

“Our collective view is that Energy Assets is a high quality company, with strong growth prospects and an excellent management team.

“As such, we would prefer to have the opportunity to remain as shareholders for years to come.

“Whilst we acknowledge that the acquisition price of 685 pence for each Energy Assets share represents a premium to the market price on the day before the announcement, we do not believe that it represents a true reflection of the fundamental value of Energy Assets.

“To evaluate fully the merits of the acquisition price however, we consider it is critical to all Energy Assets shareholders that they are furnished with more recent financial information than the financial information incorporated into the scheme circular.

“We have therefore approached Energy Assets and requested that it publish its preliminary financial results for the year to March 2016, or, at a minimum, that it publishes a trading update as comprehensive as the Q3 trading statement.

“We consider publication of these results as fundamental to informing our views on value and, should Energy Assets not be prepared to do so, we have reached the conclusion that we currently have no option but to vote against the acquisition (including the scheme) on 19 May 2016.

“We have entered into a written, legally binding unconditional agreement recording the terms on which we have agreed to collaborate with each other in order to seek to achieve a higher price.”

** Energy Assets directors responded on Wednesday night, issuing a trading update “based on unaudited management accounts of the company for the year ended 31 March 2016.”

The update said total revenue for the period increased by 25% to £45.3 million; recurring revenue increased by 12% to £26.1 million, accounting for 58% of total revenue; siteworks revenue increased by 49% to £19.2 million; and as at 31 March 2016, Energy Assets Group had available facilities and cash at bank totalling £36.2 million.  

“Energy Assets directors are pleased to report another period of strong trading activity, maintaining a continued pattern of growth across the Meter Asset Management, Data Services and Siteworks divisions, in line with the board’s expectations,” said the directors.

The board of directors reminded Energy Asset shareholders that the scheme document dated 26 April 2016 had been posted to them, explaining:

  • the unanimous recommendation of the Energy Assets directors to vote in favour of the acquisition
  • details of the irrevocable undertakings to vote (or to procure the voting) in favour of the acquisition from Energy Assets Shareholders representing approximately 44.6%. of the existing issued share capital of Energy Assets

The directors concluded: “The board of directors reconfirms its unanimous recommendation that Energy Assets shareholders vote in favour of the acquisition either in person at the Court Meeting and General Meeting on 19 May 2016 or by lodging Forms of Proxy with the Company’s registrar by the relevant deadlines on 17 May 2016.”