Renewable Energy

German push to green power is brave but risky

24 Apr 2013

Europe’s industrial leader wants to wean itself off nuclear power and fossil fuels, so Germany will become the world’s test laboratory for renewable energy. The policy is farsighted, but in urgent need of more German efficiency to keep costs under control.

Goldman renewable energy dash more than greenwash

24 May 2012

The Wall Street firm says it will deploy $40 bln over a decade. It isn’t above self-serving spin, but it’s also never far from the money. With solar and wind power nearing competitive cost levels, clean energy could burnish Goldman’s bottom line as well as its green credentials.

Uncle Sam can’t play China’s solar subsidy game

7 Sep 2011

The bankruptcy of Solyndra undermines a U.S. loan guarantee scheme that backed $535 mln of the firm’s debt. Going head-to-head against China on solar panel production is pure folly. A wiser use of tax dollars would be to try and leapfrog the Middle Kingdom on research.

Four reasons to hedge against Japanese equities

28 Mar 2011

The bright side, so hard to see in the wake of the disaster, is now the consensus in Japan's market. But politics, power shortages, consumer conservatism and the unresolved nuclear crisis are chipping away at the optimism. It is time to hedge against disappointment.

Running out of water in the UK

18 Aug 2010

The sector is unsustainable without changes in policy and the regulatory framework, a report for one of its biggest companies concluded recently. Neil Woodford, whose Invesco funds are big investors in utilities, is threatening to bail out. It's time for some radical thinking.

UK water could disappear beneath the waves

1 Feb 2010

Should Northumbrian Water be swallowed by private equity, just three UK water and sewage companies would remain listed. When the state sold the original 10, comparison was supposed to be a proxy for competition. But without the market's scrutiny, that's effectively impossible.

RWE spends E9bn on neighbourhood shopping

12 Jan 2009

The German utility is to buy Essent, a Netherlands power company, after an allDutch deal was thwarted by competition authorities last year. RWE is exploiting a Dutch market that s more liberalised than Germany s. The twist is that the deal could be blocked on those very grounds.

Kelda bid shows infrastructure market still hot

23 Nov 2007

Citigroup and HSBC's proposed £3bn bid values the UK water group at a 29% premium to its regulated assets an even higher multiple than JP Morgan paid for Southern Water last month. Clearly infrastructure funds have yet to be discouraged by the credit crunch. Investors in other UK water stocks will be licking their chops.

Southern Water deal boost for infrastructure funds

9 Oct 2007

A JP Morganled consortium is paying £4.2bn for the UK utility in the first big test of the infrastructure market since the credit crunch. Not only is the price a touch higher than originally anticipated, but the debt package is similar to previous deals. That suggests the market is still alive for the right assets.

RBS turns Southern Water into diamonds

13 Jul 2007

The UK bank s buyout arm bought the utility at its regulated asset value in 2003, and geared it up. Thanks to the miracle of leverage, and a more generous valuation of safe old water pipes, the bank looks to have tripled its money.

Sarko’s latest reported Suez scheme is rich in irony

28 Jun 2007

The French government apparently wants it to get rid of its water business before merging with GdF. Not only would that remove the only thing that's really French in Suez; it is exactly what activist shareholders have long demanded.

Veolia’s E2.6bn share sale is cost of growth

12 Jun 2007

The French utility has abandoned its reckless dreams of massive growth. But these days even sensible acquisitions are expensive. In order to pay the high prices bid up by private equity and infrastructure funds Veolia is issuing its own modestly rated shares.

France keeps foreigners out of water business

20 Mar 2007

French politicians effectively blocked PAI from selling Saur to Macquarie. The company is being sold to stateowned CDC instead. France keeps protecting its water business even though French companies keep on acquiring assets abroad. It s high time to open up.

Do infrastructure funds care about value?

15 Dec 2006

Techem, a German meterreading business, seems worried that they might not. One concern is that Macquarie would underinvest. LBO firm BC Partners might be able to add more value over time, but its bid is lower. And it will be tough to turn down more money.

Northumbrian investors may make killing

2 Nov 2006

If the UK water group is taken at anything like the rumoured 350p, those who bought into 2003's "accelerated IPO" will triple their money. This isn't because accelerated IPO's are a great method. It's because infrastructure funds with lower costs of capital have bid up values.

Macquarie defends franchise with £8bn Thames win

17 Oct 2006

The Australian bank is paying a massive price to see off the Qataris and maintain its dominance of this kind of infrastructure investing. The multiples are higher than recent water deals, yet the risks are much higher. Delivering the promised returns could be a challenge.

Will bidders fight for AWG?

2 Oct 2006

A group of infrastructure funds are forking over £2.2bn for the UK water company, which is nearly a 30% premium to RAV. Even so, investors still expect a dogfight to break out over AWG. But it s hard to see how a counter bidder could go much higher.

VW’s Scania conflict needs careful handling

14 Sep 2006

The German group s 34% stake in the Swedish truckmaker and its boss role as Scania s chairman mean it could swing MAN s hostile bid. The worry is that VW may gain more than other shareholders because it may inject its own truck business into MAN and be paid in shares.

Ofwat sticks another spoke in Thames Water sale

23 Aug 2006

The UK water regulator has already told the water company s owner, Germany s RWE, it can t sell to a rival. Now it is warning that it doesn t want a bidder to load too much debt on Thames. That doesn t rule out a buyout, but may reduce the price.

Thames Water £7bn auction impaired by regulators

16 Aug 2006

Poorly run companies deserve the ultimate market sanction takeover by a bettermanaged competitor. Badly managed Thames Water is now for sale. Regulators are doing a disservice by only allowing financial bidders for the group.