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JPMorgan sews up EcoSecurities acquisition

30 October, 2009

JPMorgan’s cash offer for emissions project developer EcoSecurities has become wholly unconditional, the US bank announced today, having secured more than 80% of the firm’s shares.

As of 12pm GMT today, the aggregate level of acceptances of the £1.05 ($1.73) per share offer combined with shares held and agreements to acquire shares by the bank’s subsidiary Carbon Acquisition Company represented approximately 83% of issued shares in London-listed EcoSecurities, the bank said.

The offer is now wholly unconditional, meaning that JPMorgan is obliged to buy any outstanding shares in the firm. The bank has also said it intends to ask EcoSecurities to apply for a delisting from London’s Alternative Investment Market (AIM), which takes a minimum of 20 business days.

The company floated on AIM in December 2005, at £1.50/share – raising £54 million.

“It looked as if it was going [JPMorgan’s] way as soon as Guanabara said it was not raising its offer,” said Nomura Code equity analyst Ken Rumph, referring to an earlier £0.90/share bid by EcoSecurities’ co-founder Pedro Moura Costa – who last week sold his shares to JPMorgan. “They got the best offer on the table.”

However, the accepted offer lags most analysts’ valuations, which had marked EcoSecurities around £1.14/share. But, said Rumph, other deals in the environmental space – such as the sale of wind energy assets – are for things that “are up and running, or at least under construction – [people] are not paying for things in the pipeline”. EcoSecurities still has a lot of carbon credits and projects under development, which may or may not be delivered, and there is uncertainty about their future value, Rumph added.

In its initial offer last month, JPMorgan said that “the acquisition will provide a platform for its growth aspirations in the carbon offset markets, and attractive opportunities for EcoSecurities’ employees and management ... Carbon Acquisitions Company believes that EcoSecurities is appropriately staffed for its market opportunities and has no specific plans to make any changes at the date of this announcement.”

Both JPMorgan and EcoSecurities declined to comment. The shares closed at £1.04 last night.

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