Total takeover of Saft10 July 2016
Following the signing an agreement between the companies, Total has filed a friendly tender offer for all shares of battery maker Saft with the French Financial Markets Authority (Autorité des Marchés Financiers (“AMF”)).
The proposed offer will target all of Saft's issued and outstanding shares at a price of €36.50 per share, ex-dividend of €0.85 per share, valuing Saft's equity at €950 million.
The offer price represented a 38.3% premium above Saft's closing share price of €26.40 on 6 May 2016, a premium of 41.9% above the volume weighted average share price over the past six months and a premium of 24.2% above the volume weighted average share price over the past year. The offer values the company at nine times its 2015 reported EBITDA, much higher than recent valuation multiples in the battery industry.
The supervisory board of Saft has unanimously approved the friendly takeover by Total and considers the proposed transaction to be in line with the interests of the company, its shareholders and its employees. As part of the reasoned opinion that it must issue in accordance with market regulations, the supervisory board has also announced its intention to recommend that its shareholders tender their shares.
The supervisory board of Saft has decided to appoint Finexsi as an independent expert.
The proposed offer is subject to review by the AMF, which will evaluate its compliance with applicable laws and regulations.
“The combination of Saft and Total will enable Saft to become the Group's spearhead in electricity storage", said Patrick Pouyanné, Chairman and CEO of Total. "The acquisition of Saft is part of Total's ambition to accelerate its development in the fields of renewable energy and electricity, initiated in 2011 with the acquisition of SunPower...It will...allow us to complement our portfolio with electricity storage solutions, a key component of the future growth of renewable energy. This transaction will also enable Saft, its management and employees to benefit from Total's technical, industrial, commercial and financial support. In addition, this transaction will enable Saft to successfully accelerate its development."
Ghislain Lescuyer, Saft's CEO, commented, "I am convinced that Total will provide Saft with the required expertise and resources needed for its future development, particularly in terms of technological and commercial capabilities. This transaction will benefit Saft's clients and employees, who will be joining a major player in the energy space."
Saft has recently been awarded a megawatt-scale Li-ion battery storage contract by Fortum. A Saft Intensium® Max containerised battery system, with a nominal output of 2 MW and 1 MWh of energy storage capacity, will be installed at Fortum's Suomenoja power plant as part of the largest ever electricity storage pilot project in the Nordic countries.
The battery project is an extension of Fortum's pioneering experiment, started in March 2016, in which a virtual power plant (VPP), based on demand flexibility, is being created together with customers. The capacity of this power plant will be offered to the national grid company Fingrid to help maintain balance in the electricity system.
Tatu Kulla, head of operations, Fortum, said: "Increasing the amount of energy produced with solar and wind power will increase the need for regulating power that balances the electricity network and for new storage solutions. When the weather is sunny or windy, there is plenty of energy production, but less demand, so it makes sense to store the electricity. In this project, we are also researching new business models that can be developed with electricity storage for electricity companies and customers."
The aim is to start installation work on the Suomenoja battery facility in September 2016, with electricity storage trials expected to begin in October 2016. The project's investment cost is about two million euros, for which Fortum will receive a 30% energy investment subsidy from the Finnish Ministry of Employment and the Economy.