Friday, November 6, 2009

Wind sector cash inflow may blow small firms away (Takeunders)

From Reuters:
Small wind energy companies could be taken over cheap because fresh funding for the sector is set to flow selectively to bigger names, placing them in a stronger negotiating position.

Analysts say the big firms are unwilling to pay premiums for the "pipeline" projects at the smaller players -- wind farms approved or awaiting construction -- which are normally added to current operating assets to arrive at a valuation....


Treasa Ni Chonghaile, fund manager of KBC's Eco Alternative Energy fund -- which holds shares in Novera -- said that German wind company PNE Wind could become a likely takeover candidate. The company's current price-to-book ratio stands at 1.3, compared with 2.3 of bigger German rival Nordex.

Britain's Clipper Windpower is another example. Last month it said it was in talks with potential investors that could lead to a "significant investment," not ruling out that the company could be taken over completely.

Like Novera it may struggle with valuation though...MORE.