Canada’s Algonquin Power & Utilities, a growing player in the North American renewables market, has reportedly offered to buy Abengoa’s stake in Atlantica Yield, among the world’s leading owners of concentrated solar power (CSP) projects.
Algonquin is ready to pay around €700m ($817m) for Abengoa’s 41% stake in Atlantica Yield, higher than any other offers currently on the table, according to a press report that cites unnamed sources in Spain, where Abengoa is based.
That offer is lower than the €900m Abengoa wants for its stake, the report says, and undervalues the yieldco’s current market capitalisation of about $2.1bn on the Nasdaq stock exchange.
In an email, an Algonquin spokesman told Recharge: “We’re certainly aware that [Abengoa is] considering options for the sale of the Atlantica stake,” but added “it is our policy not to comment on rumours”.
Atlantica Yield went public in the US in 2014 at the peak of the yieldco boom, and currently owns about 1.4GW of operating renewables capacity.
Algonquin – based near Toronto, and publicly listed in the US and Canada – owns a series of regulated utilities as well as an independent generation arm that is expanding its presence in the US wind and solar markets. After a hefty recent run-up in its share price, Algonquin’s market capitalisation now tops $4bn.
The report comes amid a flurry of M&A activity around US-listed renewables yieldcos, with Canadian investors often at the centre of the story.
Canada’s Brookfield is set to take control of bankrupt SunEdison’s two TerraForm yieldcos, while Canada’s Public Sector Pension Investment Board recently announced plans to become the largest shareholder of Pattern Energy.
Meanwhile, NRG Energy recently announced its intention to sell its renewables business, including its yieldco NRG Yield.
Atlantica Yield’s holdings include sole ownership of the Solana and Mojave CSP plants in Arizona and California, both rated at 280MW, as well as a stake in the Kaxu CSP plant in South Africa – all based on parabolic-trough technology. It also owns several wind farms and power-transmission assets in South America.
But the yieldco has essentially been stuck in limbo since Abengoa, its sponsor company, sought bankruptcy protection last year. Abengoa has managed to remain solvent, but it must sell its stake in Atlantica Yield in order to pay back creditors.