Gresham House Energy Storage (GRID) has rejected the call from PrimeStone Capital for the £565m battery fund to put itself up for sale saying its recovery strategy is working.
Having consulted extensively with other shareholders since PrimeStone published its open letter on 30 June, GRID chair John Leggate said he had received strong support for the investment company and its turnaround plan.
“After engagement with its financial advisers, and with full awareness of the current market dynamics and macro environment, the board has concluded that initiating a formal sale process for the company now would not be in the best interests of shareholders,” he said.
Leggate cited the 15.8% growth in net asset value (NAV) that GRID achieved in the second quarter, most of it from the revaluation of new battery storage installations as the projects went into construction, as evidence that its strategy set out in November 2024 was working. This followed a bad year in which a slump in UK trading revenues hit the share price and forced the cancellation of dividends, although these returned last year at a low level.
That progress, he said, was being recognised by the market with the shares up 48% over one year, although they remain well under their September 2022 peak and around 24% below the value of the company’s assets. That steep discount was the main reason why the managers of MIGO Opportunities Trust (MIGO) backed the activist’s call for an auction in July.
He held out the prospect of that valuation gap narrowing, saying “there is a lot more growth to come which is yet to be recognised in the NAV, with further augmentation, longer-duration new-build and broadening revenue streams, as highlighted in the recent capital markets webinar. These are well progressed but not yet in the reported NAV,” Leggate added.
The company will provide more detail on this in its half-year results on 23 September.
Our view
Richard Williams, senior analyst at QuotedData, said: “When PrimeStone published its letter at the end of June, we said that while it was hard to fault the activist’s logic – particularly given the gulf between public and private-market valuations for battery storage assets – there was a good argument for not rushing to sell GRID just as things appeared to be going its way. Developments since then strengthen that case. The c.16% uplift in NAV over the six months to 30 June 2026 provides tangible evidence that the investment programme is creating value, while further augmentation, new-build projects and additional revenue streams offer scope for more. Launching a sale process before that value is reflected in the portfolio risks handing some of the upside to a buyer rather than shareholders. However, the board has bought itself time rather than won the argument. Ultimately, the discount still needs to close and shareholders need to see the value being created reflected in the share price. If GRID continues to trade at a substantial discount despite delivering on its strategy, PrimeStone’s argument for testing what a third-party buyer would pay will become increasingly difficult to resist.”
