US firm and investors table Ascendant bid
A US company yesterday confirmed that it and a group of investors had made an offer to buy Ascendant Group Ltd, the parent company of power utility Belco.
Twenty First Century Utilities, which is based in Washington DC, was previously linked with interest in Ascendant in an article in The Royal Gazette last November.
A source, who asked not to be named, said this week that a $15-per-share bid for Ascendant had been tabled.
Joe Garcia, senior adviser on TFC’s management team, confirmed the bid yesterday, but not the amount.
“I can confirm that a fully funded consortium, led by Twenty First Century Utilities, did make an offer to the board of Ascendant Group Ltd,” Mr Garcia said.
Mr Garcia, a former US Congressman who has served on the National Association of Regulatory Utility Commissioners, declined to elaborate.
Last night, Ascendant confirmed that it had received correspondence from TFC.
“Ascendant Group Limited has received an unsolicited, highly conditional, expression of interest from Twenty First Century Utilities LLC (the Letter),” the company told The Royal Gazette in an e-mailed statement.
“Ascendant’s board of directors considered the Letter and, having taken appropriate legal and financial advice, unanimously determined not to pursue the Letter further, and that it is in the best interests of Bermuda and Ascendant’s customers, shareholders and employees, to continue to execute on its existing strategy.”
Ascendant’s plans include the building of the new North Power Station, which will replace ageing generators with new ones, reducing the cost of electricity for customers, and to secure debt financing to modernise its generating plant and distribution grid.
Ascendant’s closing share price on the Bermuda Stock Exchange yesterday was $10.75. Its book value, an accounting measure of the company’s assets minus its liabilities, was $27.37 per share at the end of last year, according to Ascendant’s 2017 annual report.
The source who told of the TFC offer said: “Unfortunately the offer was flat out rejected by the Ascendant board. Shareholders were not informed about this purchase offer, nor were they consulted about the opportunities presented by Twenty First Century Utilities.”
TFC is “proposing to revolutionise energy production and generation in Bermuda”, the source added. “Their model is based on taking capital and investing in energy efficiency and renewable energy, as opposed to fossil fuel-based energy production.”
It is understood that the bid was made about four weeks ago and that TFC has been researching Ascendant and the Bermuda power sector over the past two years.
According to its website, TFC owns and operates moderate-sized regulated utilities “in a manner that produces the lowest practical cost and highest levels of customer service”.
“What clearly sets us apart is that our approach proactively embraces customer-facing clean energy resources and energy-saving technologies, incorporating and balancing them with utility-scale grid resources for optimal value,” the website adds.
Larry Kellerman, a former partner at investment bank Goldman Sachs, is a founder and managing partner at TFC Utilities, and has a background of investing in the energy sector.
He has spoken before of his mission to transform regulated utilities, by driving the adoption of clean energy, and “to evolve the grid in a manner that is shaped not by our will but by the will of our customers”.
November’s article cited sources saying that local investors were teaming up with TFC in the Ascendant bid. It also quoted a spokeswoman for Ascendant, who said the company was aware that TFC had met with representatives of the Bermuda Government, the Regulatory Authority and the executive of the Electricity Supply Trade Union.
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