The offer timetable for BBGI Global Infrastructure’s (BBGI) recommended cash acquisition by Bidco, a vehicle indirectly controlled by British Columbia Investment Management Corporation (BCI), has officially resumed after all regulatory conditions were met. The deal, first announced on 6 February 2025, had been paused on 11 April pending UK foreign direct investment clearance under the NS&I Act. That approval has now been received, clearing the way for the process to continue. BBGI has confirmed that shareholders now have until 1.00pm (London time) on 20 May – 60 days – to accept the offer, which has a 90% acceptance threshold.
BBGI CEO Duncan Ball welcomed the news, stating: “We are delighted that the final regulatory clearance required for the Offer has now been received… we urge shareholders to accept the Offer as soon as possible.”
Settlement and delisting reminders
Shareholders who accept the offer by the unconditional date will receive cash settlement within 14 days. Acceptances after that date (while the offer remains open) will be settled within 14 days of acceptance. If the offer becomes unconditional, BBGI will apply to delist its shares from the official list and the London Stock Exchange, with cancellation expected no earlier than 20 business days after 20 May. BBGI says that it and Bidco may then pursue a sale of BBGI’s assets, potentially impacting the value received by shareholders who have not accepted the offer. BBGI therefore strongly encourages shareholders to accept the offer ahead of the unconditional date to avoid being left holding illiquid shares and to lock in the cash premium now on offer.
Acceptance levels still low ahead of key May deadline
Separate to the announcement of the resumption of the offer, BBGI has announced that, as of 3pm on 22 April 2025, valid acceptances have been received in respect of just 3.41m BBGI shares, equivalent to only 0.47% of the issued share capital. That’s well short of the 90% threshold required to satisfy the acceptance condition. Bidco notes that irrevocable undertakings have been received from BBGI board members representing 0.4% of BBGI’s shares. Although those board members have confirmed they have taken steps to accept the offer, their holdings have not yet been separately identified by the receiving agent in the total acceptance figure.
In its second announcement, BBGI once again urged shareholders who have not yet accepted to act promptly, highlighting the intention to delist BBGI from the London Stock Exchange should the offer become unconditional, adding that delisting would significantly impair liquidity for any shareholders who have not accepted. BBGI also referred to the potential asset sale again saying “Bidco and BBGI may proceed with an Asset Sale after delisting – a move that could leave remaining shareholders exposed to uncertain proceeds or timings. Accepting the cash offer before the deadline offers certainty and realisation of value at a premium.”
[QD comment MR: We have long said that the discounts that are currently prevailing in the infrastructure sector are significantly over done – which also holds true for the renewable energy infrastructure sector – and that the offer from BCI, which comes at a small premium to NAV, highlights the fact that the NAVs in the sector are valid. It also shows that, if the market isn’t prepared to recognise the latent value in these funds, private equity and trade buyers will do so.
BBGI only announced that the offer had received regulatory clearance, and that the timeline was being unpaused, yesterday, which may explain why take up has been low so far. Now that this hurdle has been cleared, shareholders will need to make up their minds and we might see a significant uplift in take up in the coming days (or perhaps not).
It is clear that BBGI’s board is very much in favour of the transaction, which is probably because it comes at a small premium to NAV and it likely sees limited opportunity to get another exit opportunity at a premium, given the discounts that listed infrastructure funds are currently trading at. However, with NAVs depressed in an environment of higher interest rates, and the sorts of assets that BBGI holds being relatively scarce in listed markets, shareholders may feel that BBGI warrants a stronger premium than is currently being offered. They may well reason that BCI is able to take a long-term view and clearly sees value in these assets at the modest premium it is offering, so may be holding out to see if a better price is offered down the line, particularly given the obvious attractions of BBGI’s relatively defensive, income-generating portfolio, in an increasingly uncertain environment.
What we find a little harder to understand is why shareholders are being urged so strongly to accept the offer now, so as to avoid the risk of holding an illiquid position post-delisting or from being exposed to uncertain outcomes from a potential asset sale. If the offer is good enough, we think it should be able to stand on its own merits and don’t see why shareholders, who haven’t rushed to accept the offer, have to be penalised. We observe that there are already mechanisms in place to prevent a minority of shareholders holding a bidder or other shareholders to ransom, and think that these should be sufficient to protect all sides.]
