Leaf merger for Trading Emissions

9th Nov 2009 15:28

Carbon trading business Trading Emissions and clean energy investment company Leaf Clean Energy are in merger discussions. The plan is to merge the two AIM-quoted businesses and transfer the enlarged entity to the Main Market. Trading Emissions would reverse into Leaf via an all share offer. The merger already has the backing of a number of shareholders. Shareholders owning 42.2% of Trading Emissions and 43% of Leaf promised to vote for the merger even before talks began. No firm bid valuation has been agreed as yet. At 99.5p a share, Trading Emissions is valued at £256.14m. Leaf is the smaller of the two companies - at 100p a share, it is valued at £183.63m. Both companies have strong balance sheets with cash in the bank. Leaf still had $168m in cash at the end of June 2009, although it has committed a further $65.6m of capital. Trading Emissions had just over £125m in cash at the same point but this is a cash hungry business. Trading Emissions intends to pay a 3p a share dividend in January 2010. The two companies believe that the merger would create a balanced portfolio of renewable energy and carbon-focused assets.