News

July 15, 2008

No Bid For Novera In The End, But The Share Price Is Supported By Good Progress On Wind Power Projects

By Rue Swabey

In February, Aim-listed Novera Energy, which has a portfolio of land fill gas, wind power and waste-to-energy assets, was approached by 3i Infrastructure Limited and Infinis Acquisitions Ltd. The approach caused a 50 per cent jump in the share price – it moved up to 90p in line with the tentative figure mentioned by 3i. Although in the end a bid was not forthcoming, 3i and Infinis clearly see value in Novera as they have taken stakes of 10 per cent and 29 per cent respectively. The share price corrected when the talks broke down but has since recovered as investors focus on the company’s attractive assets and steady progress on getting consent for its wind projects. Another bid cannot be ruled out, and the shares, currently trading at 82p, seem to have found some support.

Novera is the second largest landfill gas operator in the UK. It has 46 sites generating 87MW giving it a market share of 11 per cent. Its size allows for economies of scale and it has recently increased operational efficiency by bringing engine maintenance in-house and installing a 24-hour control room. The portfolio is mixed. Some sites are open and others closed. The company’s management expects output to grow over the next 18-24 months before it plateaus and begins to decline. However chief...