Drax has agreed to buy Bluefield Solar Income Fund in a deal valuing the renewable energy-focused investment company at about £561 million ($755.3 million), the British power group said on Monday.
The acquisition of BSIF, which operates wind farms, solar plants and small-scale wind turbines, will expand Drax’s UK renewables portfolio as it negotiates increasing challenges in the energy industry and seeks to hit government targets on clean energy.
Under the terms of the acquisition, BSIF shareholders will receive 92.574 pence per share in cash and an additional interim dividend of 2.25 pence per share.
Shares in Drax, which intends to fund the cash element of the deal through £1.1 billion in bridge financing, were up 0.8% by 0730 GMT after falling 1.8% initially.
BSIF shares, which have been trading at a discount to net asset value, jumped 16% to 91.2 pence.
Soaring energy prices from the blockade in the Strait of Hormuz have increased demand for renewable energy and added to market volatility that started with Russia’s invasion of Ukraine in 2022.
German utility group E.ON last month announced plans to buy OVO Energy in a deal that would create one of Britain’s largest energy suppliers, adding to consolidation within the sector.
($1 = £0.7428)
(Reporting by Simone Lobo in Bengaluru)
