JPMorgan Chase & Co agreed to buy carbon offset aggregator EcoSecurities for 122.9 million pounds ($204 million) on Monday, trumping a bid from the firm's co-founder, to boost its carbon-credit trading business.
J.P.Morgan Ventures Energy Corp., a subsidiary of the bank, said its 100 pence-a-share bid, made through Carbon Acquisition Company, had the backing of shareholders representing 19.9 percent of the company.
It said EcoSecurities had successfully realized value from sourcing, developing and trading emission reductions, and it noted the firm had recorded its first period of profitability in the first half.
The offer represents a 120 percent premium to the group's share price before the start of the offer period on June 4.
It looks like JPMorgan is backing the current management to take the business private, said Ken Rumph, an equity analyst at Nomura Code.
Ireland-based EcoSecurities Group Plc develops clean energy projects under the Kyoto Protocol's Clean Development Mechanism, which allows companies to export cuts in greenhouse gas emissions to emerging countries like China and India, where such reductions are cheaper to make.
EcoSecurities shares were up 11.5 percent at 101.5 pence by 1411 GMT (10:11 a.m. EDT).
Carbon Acquisition Company said the acceptances included 13.6 million shares held by current and former directors and 9.9 million shares owned by Credit Suisse.
In the offer statement, Carbon Acquisition said the acceptances would remain binding in the event of a competing offer being made.
It's a scorched earth, blocking tactic (and) it's a problem for Guanabara if these blocking minority figures are holding out, Rumph added.
EcoSecurities rebuffed on September 1 a revised 90 pence-a-share offer from Guanabara Holdings, set up by EcoSecurities co-founder and former president Pedro Moura Costa.
The board of Guanabara said Monday afternoon it noted Carbon Acquisition's offer and will make a further announcement following a review of its own position.
It remains to be seen if Guanabara will improve its offer and bid something closer to our 'bare-bones' valuation of 114 pence per share, said Mirabaud's Agustin Hochschild.
In July, Guanabara reached a deal with then rival bidder EDF Trading, a unit of French utility EDF, offering it the option to purchase a portion of EcoSecurities' pre-2012 offset portfolio if Guanabara's bid was successful.