A recent spate of renewable energy offerings and bids may show that the green energy share slump has turned a corner.
Acciona, the energy and infrastructure company, announced yesterday that it would conduct an initial public offering for between 15-25% of Acciona Energia. The offering would value the renewable energy arm at as much as €9.8 billion.
Meanwhile, Swedish Investment Fund EQT sent shares in Solarpack soaring after announcing an €881 million bid to take the Spanish renewables producer private.
“Acciona Energy’s IPO and EQT’s bid for Solarpack indicate that the worst is probably over for the renewable companies following the recent selloff,” Elchin Mammadov, a senior equity research analyst for European Utilities at Bloomberg, said by message.
Acciona announced a non-binding price range of €26.73-€29.76 per share as it prepares to list the renewables arm in Spain. The IPO may be increased by Acciona, granting to coordinators a call option (green shoe) representing between 10-15 percent of the shares initially offered in the renewables business, the company said.
Shares in green energy producers have retreated from January highs. But this didn’t stop Acciona, which focuses on wind, solar, and other renewables generation, from moving ahead with the sale.
“There’s no absolute need to do it now, but . . . you can’t wait to find the absolute top of the market, the peak moment: this is a 20-year project,” Chief Executive Jose Manuel Entrecanales told the Financial Times. “The most important reason [for the listing] is funding and rating.”
The Entrecanales family controls around 55 percent of Acciona conglomerate. The latter is also involved in real estate and water treatment businesses, according to the FT.
The deal may be one of the largest in what is a record for Europe so far this year, according to Reuters. Acciona aims for a valuation under the €12.1 billion achieved by Vodafone’s infrastructure unit Vantage Towers in March, but higher than the 7.6 billion pounds ($10.58 billion) achieved by British online food company Deliveroo, Reuters said.
The fundraising and takeover bid show that core market players are committing to the renewables industry. But that doesn’t mean that it’s all green lights for shares in green energy producers. There are always other factors involved.
“We’re not out of the woods yet given the rise in inflation and bond yields, as well as increasing competition pressuring returns in the industry,” Mammadov said.