The buyout chief Guy Hands will break up the listed UK power company Infinis after he takes it private later this year, marking the end of his ambitious attempt to build a British green energy conglomerate.
Mr Hands, one of the City’s best known deal makers, will explore plans to spin off and sell the company’s wind farms from the rest of the group in the first half of next year.
The remaining portion of the business could then be sold separately or offloaded as a single entity.
The veteran financier said he would spend £175m to buy the rest of Infinis he did not already own. It values the company at £555m.
Terra Firma, Mr Hands’ private equity firm, floated Infinis on the London Stock Exchange in 2013, but it was subsequently laid low by an overhaul of green energy policy by the Chancellor, George Osborne.
“We have considered gradual sell-downs of our interest in the company since its IPO in November 2013 and, more recently, we have also explored other strategic options, but the change in the regulatory environment for Infinis has prompted us to rethink our strategy,” Mr Hands said.
Terra Firma, which is investing in the deal through a firm called Monterey Capital, is offering shareholders 185p a share for the 30 per cent stake. Infinis shares jumped 39 per cent to 183.75p.
Mr Hands indicated in December 2014 that he wanted to sell his 70 per cent but the idea came to nothing after offers came in below the price he wanted. At that time the shares were trading at about 220p – below the flotation price of 260p.
They subsequently fell further after a raft of changes made by Mr Osborne, targeting green energy subsidies which had benefitted Infinis.
The Chancellor decided to end a support mechanism for onshore wind and also scrapped an exemption for some firms from the climate change levy.
Infinis was formed out of a merger of a Terra Firma-owned called Waste Recycling Group and the former landfill assets of Shanks in 2006. It added Novera Energy in 2009 to give it more onshore wind capacity.
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