Viridian Group has agreed to a £1.62 billion sterling takeover by Bahrain-based financial investor Arcapita.
Arcapita, previously known as First Islamic Investment Bank, said in a statement today that it was attracted by the stable returns generated from the largely regulated business.
The deal is Arcapita's largest to date and comes after it bought Finnish insulation product maker in June for €620m.
Viridian and Arcapita's ElectricInvest Acquisitions said in a joint statement that investors in the Northern Irish firm would receive 1,325 pence in cash for each share. In addition, Viridian is paying an interim dividend of 11 pence.
Viridian shares leapt almost 9% to an all-time high of 1,330 pence in London today. Its shares had risen 15% yesterday after it said it had received a bid approach. The company's shares were unchanged in Dublin trade, however.
Arcapita, which already has utility interests elsewhere in the UK, said its Viridian investment was 'for the long haul'. In 2004, it bought South Staffordshire water in a deal valuing the firm at around £245m.
Arcapita is also one of three investors in Zephyr Investments., which operates a portfolio of wind farms. The others are Germany's RWE and Englefield Capital.
Arcapita operates out of Bahrain, Atlanta and London, and has a balance sheet of $1.9 billion and an equity capital base of about $400 million, according to its Web site.
Belfast-based Viridian is the holding company for Northern Ireland Electricity (NIE) and almost all of its income comes from the utility business. NIE had around 760,000 customers.
Viridian's Energia arm supplies electricity to competitive non-domestic electricity markets in both Northern Ireland and the Republic and has a 25% market share in the business electricity market on an all-island basis. It owns a power station in Dublin and is building another nearby.
'Viridian has developed a substantial position in the competitive electricity supply markets on the island of Ireland, including a significant investment in new generating plant in the Republic of Ireland', commented Dipesh Shah, Chairman of Viridian.
'Together with the growth in its regulated business in Northern Ireland, this has delivered substantial value for shareholders, which is reflected in the proposal from Arcapita,' he added.
