IML retains holding in Energy Developments

19 January 2010

IML has confirmed that it will hold on to much of its stake in the ‘clean’ energy producer, Energy Developments, in the face of a takeover offer by private equity firm Pacific Equity Partners (PEP), which IML believes undervalues the company.  While making only a small partial acceptance of the takeover offer, IML’s Senior Portfolio Manager, Simon Conn noted that IML will not be accepting the takeover offer in respect of its remaining shares, subject to an acceptable change in the terms of the offer. IML’s remaining shareholding in ENE will be 10.16%.

Given IML’s conservative and value-focused approach we typically seek to purchase shares in quality companies that we consider are undervalued. Consistent with this approach, IML has a genuine long term focus in respect of its investments and is willing to be patient in waiting for their value to be recognised.

IML reiterates the view (in respect of which it was quoted in ENE’s Target Statement) that the current terms of the takeover offer undervalues the company. IML believes that ENE, under PEP’s control, is well positioned to grow and ultimately deliver the value inherent in ENE’s businesses. To that end, IML looks forward to partnering with PEP, and its private equity investors, to realise this value.

IML recognises that PEP will be left with a majority shareholding in ENE following its takeover bid and that trading in ENE shares will likely be illiquid. IML believes that its remaining shareholding in ENE gives each of the equity portfolios that it manages a position in ENE of a size that is in IML’s investors’ best interests.  The size of these positions reflects the liquidity risk within each of these portfolios while at the same time giving them sufficient upside in recognising ENE’s value as a co-investor with PEP.

We look forward to PEP managing ENE's excellent asset base to maximize value for all shareholders, including IML, in the years ahead.