WORKERS CAPITAL
Canada pension explores buying out ReNew Energy shareholders
Bloomberg News
,Mar 24, 2023
Canada Pension Plan Investment Board is exploring buying the shares of ReNew Energy Global Plc that it doesn’t already own and taking the Nasdaq-listed firm private, according to people with knowledge of the matter.
The asset manager is in talks with advisers to weigh a tender offer, according to the people, who asked not to be identified discussing confidential information. CPPIB holds a majority stake in ReNew Energy, the people said, adding that talks are ongoing and no final decision has been reached.
Delisting of the Gurugram, India-based power producer, with a market capitalization of more than US$2.2 billion as of Friday, will give CPPIB greater control over the firm that competes with deep-pocketed rivals. India presents a massive opportunity for clean energy developers as it aims to almost triple non-fossil fuel power capacity to 500 gigawatts by 2030.
ReNew Energy Global Plc Class A shares rose more than 23 per cent, its biggest single-day gain ever, on Friday after Bloomberg News reported CPPIB’s plan to take it private. The stock had dropped to a record low earlier this month.
The potential “privatization might reduce transparency, but could eliminate distraction from its share price, which has more than halved since its listing,” Sharon Chen, an analyst at Bloomberg Intelligence, said in a note. It “could demonstrate support from a strong shareholder and cause ReNew’s bonds to tighten.”
A spokesperson for CPPIB said the company will not comment on market speculation, while ReNew’s spokesperson declined to comment.
CPPIB bought US$268 million worth of ReNew shares from Goldman Sachs Group Inc. this month, giving the Canadian firm a stake of 51.6 per cent, according to the Business Standard newspaper. ReNew’s other backers include Abu Dhabi Investment Authority, according to data compiled by Bloomberg.
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