RNS Number : 3413B
Novera Energy PLC
26 October 2009
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
FOR IMMEDIATE RELEASE
26 October 2009
Novera Energy plc
("Novera" or the "Company")
Posting of response circular recommending that Novera Shareholders
reject the Infinis Offer
The Board of Novera has today written to Novera Shareholders advising them why the Board considers that the Offer of 62.5 pence per Novera Share made by Infinis substantially undervalues the Company and its prospects, and why it continues to recommend that all Novera Shareholders reject the Infinis Offer.
Commenting on the Infinis Offer, Roy Franklin, Chairman, said, "The Board considers this Offer to be wholly inadequate. Novera has attractive core operating assets and an exciting and valuable wind portfolio. Our management team has strength in depth and the skills and experience to take our business forward. The Board of Novera remains fully committed to delivering shareholder value to all its Shareholders and therefore strongly urges Shareholders to reject this cheap and opportunistic Offer."
The response circular posted today to Novera Shareholders sets out the Novera Board's reasons for rejecting the Infinis Offer, and in particular highlights the following:
Since Infinis acquired Novera Shares at 90 pence per share in Spring 2008, the Company has made tangible and significant progress. Lissett Airfield wind farm has become fully operational, three new wind projects have achieved planning consent and four wind projects have been submitted into planning; and
The Directors believe that the Infinis Offer substantially undervalues the Company's current portfolio of operating and development assets alone. In addition, the Directors believe that significant additional value should be ascribed to:
As at 15 October 2009, the Company had received letters of support from Novera Shareholders holding, in aggregate, 46,589,699 Novera Shares, representing approximately 32.2 per cent. of the existing issued share capital of the Company. These shareholders have each stated that the Offer substantially undervalues Novera and that they support the Novera Board in rejecting the Offer.
The Novera Board, which has been so advised by Hawkpoint and Oriel Securities, firmly believes that the Infinis Offer substantially undervalues Novera and unanimously recommends that you reject the Infinis Offer by taking no action.
Novera Shareholders are strongly advised to ignore any documents that may be issued by Infinis or its advisers and not to sell their Novera Shares.
Novera Energy plc
Roy Franklin, Chairman
Richard Round, Acting Chief Executive Officer/Finance Director
Tel: +44 (0) 20 7845 9720
Hawkpoint Partners Limited (Joint Financial Adviser)
Rupert Newall / Alastair Rogers / Andreas Zapf
Tel: +44 (0) 20 7665 4500
Oriel Securities Limited (Joint Financial Adviser, Nominated Adviser and Broker)
Richard Crawley / Michael Shaw
Tel: +44 (0) 20 7710 7600
Kreab Gavin Anderson (PR)
Ken Cronin / Kate Hill / Michael Turner
Tel: +44 (0) 20 7074 1800
Further information for Shareholders, including the bases of calculation and sources for the information set out in this announcement and the definitions of certain terms used in this announcement, is contained in the circular being posted today, a copy of which, together with a copy of this announcement, is available at the website of the Company at www.noveraenergy.com/announcements.php and available for inspection at the offices of Osborne Clarke, One London Wall, London EC32Y 5EB until the end of the Offer Period.
The Novera Directors accept responsibility for the information contained in this announcement, except that the only responsibility accepted by them in respect of the information contained in this announcement relating to Infinis, which has been compiled from published sources, is to ensure that such information has been correctly and fairly reproduced and presented. To the best of the knowledge and belief of the Novera Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this announcement for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
Hawkpoint, which is authorised and regulated in the United Kingdom by the Financial Services Authority is acting for Novera and no one else in connection with the Offer and will not be responsible to anyone other than Novera for providing the protections afforded to clients of Hawkpoint or for providing advice in connection with the Offer.
Oriel Securities, which is authorised and regulated in the United Kingdom by the Financial Services Authority is acting for Novera and no one else in connection with the Offer and will not be responsible to anyone other than Novera for providing the protections afforded to clients of Oriel Securities or for providing advice in connection with the Offer.
Forward looking statements
This announcement contains certain forward looking statements with respect to the financial condition, results of operations and business of Novera or the Novera Group and certain plans and objectives of the Board of Novera. These forward looking statements can be identified by the fact that they do not relate to historical or current facts. Forward looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the Board of Novera in the light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward looking statements involve risk and uncertainty and the factors described in the context of such forward looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward looking statements.
Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this announcement. Except as required by the Financial Services Authority, the London Stock Exchange, the AIM Rules or any other applicable law or regulation, Novera assumes no obligation to update or correct the information contained in this announcement.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of "relevant securities" of Novera, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m. (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Novera, they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of Novera by Infinis or by Novera, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel.
The following is the text of the "Letter from the Chairman of Novera Energy plc" contained in the response circular posted today to Novera Shareholders.
Dear Novera Shareholder,
Reject the Infinis Offer - it is wholly inadequate and opportunistic
I am writing to set out the reasons why your Board believes that the Infinis Offer substantially undervalues Novera and its prospects and strongly recommends that you reject it and take no action in relation to it.
You should by now have received a document from Infinis, containing details of its Offer to buy your Company for 62.5 pence per Novera Share.
The background to this Offer is that:
from 17 March 2008 to 1 May 2008, Infinis acquired a 29.1 per cent. stake in your Company at 90 pence per Novera Share following a period of detailed due diligence;
in July 2008, Infinis subscribed for further shares in your Company as part of a share placing at 77 pence per Novera Share; and
on 6 October 2009, Infinis acquired a further 13.0 per cent. stake at 62.5 pence per Novera Share, taking its total holding to 42.6 per cent. Following this purchase, Infinis was obliged under Rule 9 of the City Code to make an Offer for the remaining shares in Novera for a minimum cash price of 62.5 pence per Novera Share.
Infinis was prepared to purchase Novera's Shares previously at 90 pence per share following a period of detailed due diligence; since then the Company has significantly progressed the development of its wind portfolio and enhanced the value of its operating assets.
Infinis launched its Offer without engaging in any discussions with the Novera Board.
On 15 October 2009, we announced that the Board had received letters of support from major institutional Shareholders representing approximately 32.2 per cent. of the existing issued share capital of the Company. These Novera Shareholders have each stated that the Offer substantially undervalues Novera and that they support the Board in its rejection of the Offer. This strengthens the Board's resolve in rejecting this cheap and opportunistic Offer.
Reject the Infinis Offer
The following pages summarise the key reasons why you should reject the Infinis Offer.
Novera has a strong platform for further growth
Novera has a cash generative operating base in landfill gas, hydro and wind
Novera has an exciting and valuable wind portfolio, including operating, consented and development stage projects
Novera's senior management team of six has over 130 years' combined experience in the energy sector and a proven track record of originating new renewable projects and successfully bringing them through the planning and consent stages into operation
The building blocks and strategy are in place to deliver continuing growth and Shareholder value
Novera has an attractive future as an independent company
UK onshore wind is an attractive sector for investors
UK onshore wind capacity is expected to grow from 2.6GW in 2008 to an estimated minimum of 14GW by 2020, supported by the UK Government and EU policy for renewable energy generation targets
Historic grid connection and planning consent hurdles are being addressed by the respective regulatory bodies
Clear support mechanisms are in place to underpin the economics of wind development
Novera is experiencing an improved competitive environment in bank financing for UK onshore wind projects and in turbine supply, as demonstrated by our recent announcement in relation to our Glenkerie wind farm project
Limited alternative UK quoted vehicles for investors to participate in the UK wind sector
The Board believes that the Company has a scarcity value
Novera is the largest quoted UK company focused solely on the UK renewable energy generation sector by MW installed
Infinis wants to acquire Novera in order to benefit from its wind portfolio and development team
The Infinis Offer substantially undervalues Novera's assets
The Directors believe that the Infinis Offer substantially undervalues your Company's current portfolio of operating and development assets:
– 143MW of installed capacity across landfill gas, hydro and wind benefiting from increasing average realised power prices as historic below-market price contracts expire
– 72MW of consented wind projects and 49MW of sites in planning, driving improvement in revenue mix
– continuing improvement in operating and financial performance as demonstrated by our strong current trading and consistent quarterly growth in 2009
Since Infinis acquired Shares at 90 pence per Share, your Company has made tangible and significant progress
Over the last 18 months, Novera has made considerable progress in developing its business:
– Lissett Airfield wind farm (30MW) became fully operational in April 2009, on time and under budget
– 3 wind projects have achieved planning consent, totalling 72MW of potential capacity
– 4 wind projects have been submitted into planning, totalling 49MW of potential capacity
Infinis recognises the attractions of Novera, but its Offer substantially undervalues your Company
Infinis is yet to start construction of its first wind farm
It has stated the following:
– “Over time we plan to generate electricity from other renewable sources and our initial diversification plan is for onshore wind” (Source: Infinis’ Annual Report & Accounts, 2009)
– “Novera’s wind team, operational wind farms and development portfolio of wind sites will add to Infinis’ own wind development activity and will enhance Infinis’ capability and credentials in the onshore wind market” (Source: Infinis’ Offer Document, 12 October 2009)
– “Infinis considers that there is a significant overlap between the two businesses and intends to optimise the businesses by leveraging best practices from each of the organisations and removing duplicated activity within the enlarged business” (Source: Infinis’ Offer Document, 12 October 2009)
The Directors believe that the Infinis Offer substantially undervalues the Company's current portfolio of operating and development assets.
In addition, the Directors believe that significant additional value should be ascribed to:
Your Board, which has been so advised by Hawkpoint and Oriel Securities, firmly believes for the reasons outlined above that the Infinis Offer substantially undervalues Novera and its prospects and unanimously recommends that you reject the Infinis Offer by taking no action. In providing their advice, Hawkpoint and Oriel Securities have taken into account the Board's commercial assessment.
We have received letters of support from major institutional Shareholders representing approximately 32.2 per cent. of the existing issued share capital of the Company. These Novera Shareholders have each stated that the Offer substantially undervalues Novera and that they support the Board in its rejection of the Offer.
Your Directors will not be accepting the Infinis Offer in respect of their own beneficial shareholdings amounting to, in aggregate 341,804 Novera Shares, representing approximately 0.24 per cent. of the issued share capital of Novera.
Roy A Franklin OBE
26 October 2009
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