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Arcapita to buy Irish power supplier for £1.62bn

The Bahrain-based firm has offered 12 times listed energy company Viridian Group’s EBITDA in a recommended 1,336 pence per share takeover bid.

Arcapita, a Bahrain-based investment firm, has had its £1.62 billion (€2.4 billion; $3.04 billion) takeover approach for Viridian Group recommended by the board of Northern Ireland’s main electricity supplier.
 
Viridian announced late yesterday that it was considering an approach for the company, revealed this morning to be from Arcapita through its investment company ElectricInvest Acquisitions.
 
Arcapita has offered 1,336 pence per share, valuing Viridian’s entire share capital at £1.62 billion. The offer is a premium of 36.8 percent to Viridian’s average closing price over the last six months of 977 pence per share and 23 percent above the closing price of 1,086 pence on 4 October, the last business day prior to the announcement of an approach.
 

Viridian’s share price in the past week

The 1,336 pence offer is also 11.9 times Viridan’s pro-forma EBITDA of £172.3 million for the year ended 31 March 2006.
 
At 11am BST today, shares were trading at 1,327 pence, up from yesterday’s closing price of 1,221 pence.
 
Debt for the transaction has been arranged by Dresdner Kleinwort and underwritten by Dresdner Bank. Arcapita is being advised by Dresdner Kleinwort, Viridian by Credit Suisse.
 
If the offer is successful, Viridian will de-list from the London Stock Exchange and the Irish Stock Exchange.
 
Belfast-based Viridian supplies power and builds and maintains transmissions networks in Northern Ireland through its Northern Ireland Electricity (NIE) business, and supplies electricity to over 25,000 business customers in Northern Ireland and Republic of Ireland through Energia. It’s Powerteam arm also provides high voltage electrical contracting and other infrastructure services to NIE and other utility and industrial customers.
 
The company reported revenues of £976.8 million for the year ended 31 March 2006, up from 2005 revenues of £835.4 million. Pro-forma operating profits for the period totaled £132.4 million with net assets of £252.5 million.
 
As part of the offer, Arcapita has agreed to make a one-off contribution of £50 million and annual contributions of £6 million to Viridian’s pension scheme, which had a deficit of £102.9 million in March.
 
Arcapita, which also has offices in London and Atlanta, has made several other investments in the utility and energy sectors, including South Staffordshire, a water utility company in the Midlands; Zephyr Investments, a joint venture with RWE Npower, which owns 19 wind farms across the UK; and Falcon Gas Storage Company, a supplier of gas storage services in the US.
 
Earlier this week, 3i partnered with the Canada Plan Investment Board, Colonial First State Global Asset Management and Industry Funds Management to make a £2.2 billion takeover offer for AWG, owner of Anglian Water.