Gore Street Energy says Saba's disruption blocked German asset sale
Gore Street Energy Storage Fund PLC on Thursday said it has halted the sale of its German assets due to "disruption" caused by activist investor Saba Capital Management LP.
Shares in the energy storage fund, which holds assets across the UK, Ireland, Western Europe and the US, were down 0.4% at 47.08 pence on Thursday afternoon in London.
Gore Street Energy said it had reached an advanced stage of the sale, which involves an operational project in Cremzow, Germany, with a capacity of 22 megawatts, when the prospective buyer significantly lowered its offer.
The company said the latest offer did not represent fair value for shareholders. It has therefore halted the sale to the prospective buyer and said it would re-engage with other potential interested parties.
Gore Street Energy said the reduction in the offer was not motivated by market conditions, as the asset was achieving revenue of £17.19 per megawatt-hour in the first quarter. The company said the most likely reason for the reduction was the resolutions Saba has requisitioned for the firm's upcoming annual general meeting.
Gore Street Energy Chair Angus Gordon Lennox said: "This is an unfortunate and frustrating development in light of this sale process being in a very advanced stage." He added: "One of the consequences of the requisitioned Saba resolutions is that live sale processes may be adversely affected, either because the company is perceived to be a forced seller or because of broader uncertainty regarding its future, and with consequent detrimental impacts on the value achievable for shareholders."
In August, Gore Street Energy urged shareholders to vote against Saba's resolutions 16 and 17 at the AGM, which will be held on Wednesday next week.
On Thursday, the company reiterated its position, saying it had the support of two UK advisory bodies, ISS Corporate Solutions Inc and Pensions & Investment Research Consultants Ltd.
New York-based Saba, which has an 18% stake in Gore Street Energy and has recently shown increased interest in several London-listed companies, proposed resolutions asking for Gore Street Energy's wind-down as an investment company.
It also criticised the company's discounted net asset value and the sale of its Irish Kilmannock and Mucklagh projects, without disclosure of the prices, to a fund managed by Gore Street Energy's own investment manager.
In August, Gore Street Energy said it could not disclose the exact value of the Kilmannock and Mucklagh transaction due to "commercial sensitivity".
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