Renewable Energy receives takeover approach

Renewable Energy Generation said it has received a non-binding approach for its trading subsidiaries, representing the business, assets and undertakings of REG.

It said the offer, which is subject to due diligence, would generate an estimated net cash distribution of around 60p per share, representing a premium of 61% to the closing price of REG on 8 October.

Renewable said it views the potential buyer as a “highly credible, fully funded counterparty able to implement the offer through a streamlined and timely acquisition process”.

The assets include the net debt of the group of £10.5m,comprised of £26m of debt, £2.7m of restricted cash and £12.8m of unrestricted cash.

The company said the offer envisages that at the closing of the transaction, certain subsidiaries within the assets will be acquired by a new company formed by the executive management team of REG.

But Renewable did not say which would be sold to the buyer and which would be be spun off after the deal.

The company said that as the officer involves related parties, it is being considered by the non-executive directors of REG in consultation with their advisers.

Renewable said shareholders should be aware that, in the event the transaction proceeds, the independent directors would also put forward proposals to cancel REG's admission to trading on AIM, place the company into members' voluntary liquidation and thereafter to return available cash to shareholders.

It added that the transaction would be subject to the consent of REG shareholders in a general meeting.

At 0830 BST, Renewable Energy shares were up 34% at 50p.