'This could be biggest acquisition our business has made': Drax secures agreement to buy BSIF
Energy company Drax is poised to secure a major acquisition which will grow its UK renewable generation business.
The boards of directors of Bluefield Solar Income Fund Limited (BSIF) and Drax Bidco have reached agreement on the terms of a recommended all cash acquisition by Drax Bidco of BSIF. The acquisition is to be effected by means of a court-sanctioned scheme of arrangement and the cash consideration values the entire issued share capital of BSIF at approximately £548m.
Michael Gibbons CBE, chair of BSIF, said the group was a pioneer in creating the first UK-listed investment trust focused primarily on UK solar energy infrastructure.
He added: "Since its IPO (initial public offering) in 2013, BSIF’s operating portfolio has grown with the UK Solar PV market to c.850MW, including an expansion into the onshore wind and battery storage asset classes. In that time, BSIF has delivered a total shareholder return of 122 per cent and, as at BSIF’s most recent results, generates enough green electricity to power over 326,000 homes with renewable energy. None of this would have been possible without the resources and considerable expertise of Bluefield Partners, the investment adviser whose management of this company has established them as one of the leading experts in the renewables industry.
“However, since autumn 2022, a changed interest rate environment has contributed to BSIF Shares trading at a consistent double digit discount to NAV(Net Asset Value).
"Without fresh capital to invest in new projects, the portfolio’s quarterly NAVs have naturally declined with the payment of dividends. Against this changed backdrop, following an earlier evaluation of strategic options and shareholder feedback which indicated a clear preference for value maximising options, the BSIF board acted decisively to initiate a formal sale process.
"The BSIF board is pleased with the conclusion of this process and believes the acquisition at a 31 per cent. premium (including the permitted dividend) to the closing share price on 4 November 2025, represents a highly attractive outcome for BSIF shareholders and a compelling opportunity to crystalise value in cash. The BSIF board unanimously recommends that BSIF shareholders vote in favour of the acquisition.”
Commenting on the Aacquisition, Will Gardiner, CEO of Drax, said: “The UK’s energy system is rapidly evolving and to meet its changing needs Drax is transitioning too.
He added: “We are excited about the opportunities we have to invest in growing our business and supporting the country’s long-term energy security by adding new sources of generation and storage to our portfolio.
“BSIF could potentially be the biggest acquisition our business has ever made. It represents an attractive opportunity to substantially grow our renewable generation business, while being highly complementary to the wider Drax Group’s existing operations and FlexGen portfolio.”
Mr Gardiner said the deal can help meet the UK’s energy goals of security of supply, affordability and decarbonisation as rising levels of renewable electricity are expected to meet growing national power demand.
He added: “The acquisition is part of our plan to allocate up to £2 billion into flexible and renewable energy through the decade,,There is no change to our capital allocation policy as a result of the potential transaction. We remain committed to our balance sheet targets, including returns to shareholders.”