In This Article:
(Bloomberg) -- Innergex Renewable Energy Inc. surged after pension manager Caisse de Depot et Placement du Quebec agreed to buy the Canada-based power company in an all-cash deal that values it at about C$10 billion ($7 billion) including debt.
Most Read from Bloomberg
-
Trump Targets $128 Billion California High-Speed Rail Project
-
Trump Asserts Power Over NYC, Proclaims ‘Long Live the King’
-
NYC’s Congestion Pricing Pulls In $48.6 Million in First Month
-
As Visitors Discover Ghent, the City Is Trying to Prevent a Tourism Takeover
Innergex investors will receive C$13.75 per share, a 58% premium to Monday’s close, the companies said Tuesday in a statement. At that price, the company’s equity is worth about C$2.8 billion. Innergex shares rose as much as 55% on Tuesday.
Quebec-based Innergex operates hydroelectric facilities, wind farms, solar farms and energy storage facilities in Canada, the US, France and Chile. The firm has interests in 90 facilities with an aggregate installed capacity of more than 3,700 megawatts, and 17 projects under development.
Even as some generalist investors sour on renewables, pension funds and insurers with long-dated liabilities remain interested in safe, contracted returns that operating wind and solar farms offer.
Investments in Renewables
Quebec’s government-owned power utility, Hydro-Quebec, owns about 20% of Innergex and supports the transaction. CDPQ is already the second-largest holder. The buyout is expected to close in the fourth quarter.
“Although, the transaction is not yet finalized, there should be an opportunity for another bidder to approach Innergex over a 65-day go-shop period,” Rupert Merer, a National Bank of Canada analyst, said in a note to clients. “The transaction comes just shy of our C$16/share price target.”
CDPQ has a history of investments in renewable energy projects around the world. It’s one of biggest investors in the US giant Invenergy LLC along with Blackstone Inc., and is also the largest shareholder in Innergex rival Boralex Inc., according to data compiled by Bloomberg.
Boralex shares soared as much as 8.4% in trading Tuesday.
“This investment perfectly illustrates our constructive capital and dual mandate in action: while we strive for optimal returns, we are committed to supporting essential businesses headquartered in Québec, such as Innergex,” Emmanuel Jaclot, CDPQ’s head of infrastructure, said in the statement.
The deal comes at a moment where Hydro-Quebec is looking to invest close to C$200 billion to build new power generation capacity and improve transmission reliability by 2035.