AI will power up buyout barons’ green-energy spree
The author is a Reuters Breakingviews columnist. The opinions expressed are her own. Updates to add graphic.
By Yawen Chen
LONDON, May 30 (Reuters Breakingviews) -Artificial intelligence is reviving the moribund renewable-energy market. Following recent green-power take-privates by KKR KKR.N and EQT EQTAB.ST, Canadian investor Brookfield Asset Management on Thursday said it was in exclusive talks to buy French solar and wind specialist Neoen NEOEN.PA. The 6.1 billion euro ($6.6 billion) takeover would mark the largest renewable deal since at least 2015, one sector banker told Breakingviews. It won’t be the last big one.
Renewable energy producers like Neoen have taken a beating in recent years as central banks hiked interest rates, which raises the discount rate and shrinks present value of long-term projects. Neoen’s shares closed on Wednesday at roughly half their early 2021 peak, partly because of successive rights issues. Alternative-asset giant Brookfield and fellow investor Temasek are offering the controlling shareholders a 27% premium to the undisturbed price, and will subsequently extend the same offer to the listed group’s minority shareholders.
The valuation looks reasonable, at around 17 times forecast 2024 EBITDA, including debt. Neoen traded at similar levels in the second half of 2021. It also outshines KKR’s recent offer to Encavis ECVG.DE, which valued the German renewables group at 15.8 times forward EBITDA.
Both parties are motivated to strike the deal. Brookfield has just agreed with Microsoft to build a massive 10 gigawatts of renewable capacity to help supply clean power for data centres for artificial intelligence. Neoen will help, given its pipeline of projects and 2030 target of 20 gigawatts of capacity. The French firm also has a large presence in Australia, where Brookfield wants to expand.
For Neoen and its shareholders, the 2030 production target would be a stretch with its extremely constrained balance sheets. Analysts expect its net debt to EBITDA ratio to hit an eye-popping 8 times by the end of this year, using Visible Alpha consensus forecasts. The company has already called on shareholders multiple times, and may be reluctant to tap them for cash again.
Broader trends are also helping renewables. Goldman Sachs sees the AI boom as a near-$1 trillion opportunity for the sector as tech companies invest in data centres to train their power-hungry large language models. And central banks seem more likely to cut than raise rates, meaning valuation multiples may have found a floor. Other possible sector targets for private equity include Spain’s $7 billion Corporacion Acciona Energias Renovables ANE.MC, and Norway-based $1 billion Scatec SCATC.OL. Green buyouts are in a sweet spot.
Follow @ywchen1 on X
CONTEXT NEWS
Canada's Brookfield Asset Management on May 30 said it had entered exclusive negotiations to buy just over half of French renewable-power producer Neoen from its key shareholders, including the family investment vehicle of entrepreneur Jacques Veyrat.
The deal, which Brookfield will pursue through its Global Transition Fund II along with listed subsidiary Brookfield Renewable, values Neoen’s equity at 6.1 billion euros ($6.6 billion). Singaporean state investor Temasek will also invest.
After buying the 53% controlling stake, the bidders plan to make a cash offer for the rest of the equity at the same price of 39.85 euros per share.
Neoen’s shares, which closed at 31.4 euros on May 29, were suspended as of 1007 GMT on May 30.
Neoen's share price since 2018 initial public offering https://reut.rs/3RaWQKb
Editing by Liam Proud and Streisand Neto
Ativos relacionados
Últimas notícias
Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.
Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.
Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.
