Acquila has announced it has terminated plans for a possible merger after its shareholders turned down the proposals.
The company announced in December 2023 it was considering broader options for its future, including the possible combination with another listed investment company by way of a Section 110 scheme of reconstruction under the Insolvency Act 1986.
The board of AERI announced in February that following the receipt and review of a number of indications of interest in a Section 110 combination, a process of mutual due diligence with multiple interested parties had commenced.
Through the Section 110 Review, the Board received indicative non-binding section 110 offers from Octopus Renewables Infrastructure Trust plc and two other investment companies. Each offer proposed the issue of newly issued shares of the listed investment company offeror as consideration and one indicative offer included a cash exit facility of up to 10% of the total consideration.
On the basis of a NAV for NAV exchange, each of the three indicative offers represented an implied look through value ranging from a small premium to a discount to the current AERI share price.
Following the 2023 annual results, feedback on the Section 110 Review has been received from shareholders representing a majority of the total voting rights of Acquila.
Shareholders representing more than 25% of the total voting rights of the company, sufficient to block a potential vote on a Section 110 combination, indicated they are not supportive of such a move.
“Alongside the shareholder feedback, the board has taken into account the discount to NAV that the listed investment company renewables sector is currently trading on and believes that at this time, a Section 110 combination with another listed investment company is not value enhancing when weighed against the other potential options open to the company,” said Acquila.
“The board is also mindful of the additional financial costs that it would incur in running the Section 110 Review to its conclusion. The board has therefore decided to terminate the Section 110 Review.”
Acquila said it will continue to review its options which include a wind-down of the company, a potential sale of some or all of its and the possible continuation of the company in its present form.
The board said it expects to provide a further update before the end of second quarter 2024, and reaffirmed its commitment to hold a vote on the company’s continuation at a shareholder meeting expected to be held in September 2024.