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Greentech Stands by Offer as Fersa Says Doesn’t Reflect Value

Greentech Energy Systems A/S is pressing ahead with its 40 euro cent a share offer for Fersa Energias Renovables SA after the Spanish clean energy company said the bid didn’t reflect its value.

“We believe it’s more than fairly priced given the market conditions and the comparable multiple analysis, the problems of the company and the size of its indebtedness,” said Sigieri Diaz della Vittoria Pallavicini, chief executive officer at Copenhagen-based Greentech Energy Systems.

Greentech’s offer values Fersa at 56 million euros ($73 million) based on its 140 million shares, the CEO said. Combined with Fersa’s debt, the takeover transaction is worth about 300 million euros, he said in a phone interview. The market value of Barcelona-based Fersa is about 62 million euros.

Greentech is seeking to buy companies in distress due to the European debt crisis with plans to boost renewable capacity to 1 gigawatt by 2014. It currently operates about 300 megawatts of projects in countries such as Italy, Germany and Spain.

The shares of Fersa have fallen almost two-thirds this year as governments including Spain cut back on state-aid for clean power plants to pare debt. Spain is Fersa’s largest market, according to the company website.

Greentech’s offer was an “unsolicited takeover bid” that doesn’t reflect company’s real value, Fersa said in a statement dated April 17. The company didn’t immediately comment when contacted today by phone. Greentech started the offer to buy all of Fersa’s shares on April 13.

“We are near nine times Ebidta, and nine times Ebitda does not reflect the valuation of renewable companies today,” Diaz Pallavicini said, citing Acciona SA. The Spanish clean power company trades at 8.23 times Ebitda, according to Bloomberg data.

Combined Entity

A combined Fersa and Greentech would have 580 megawatts of installed capacity by the end of this year and gain Greentech entry to markets including India, the third-biggest wind market, as well as France, he said.

Greentech would finance the transaction with a loan agreed to though not yet signed with a European bank, he said.

“It will not be an easy deal because it’s in Spain,” Diaz Pallavicini said. Spain halted subsidies for new renewable energy projects in January. “It’s a terrible economic climate, so to come out and invest 300 million euros in Spain is not so obvious,” he said.

The bid is subject to acceptance of more than 50 percent of shareholders and made on the condition that Fersa doesn’t sell any projects or parts of its facilities, he said. Net debt for the companies would be 480 million euros, he said. Combined revenue would be 120 million euros.

Diaz Pallavicini aims to have the bid approved by the regulator by mid-June. The Fersa board will make formal response once that’s authorized, according to Fersa’s statement.

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