Ontario Teachers' Pension Plan, Toronto, and Public Sector Pension Investment Board, Montreal, are about to kick off the sale of U.K. renewable energy company Cubico Sustainable Investments.
The two pension funds are working with Bank of America and Canadian Imperial Bank of Commerce on a potential transaction. The owners are considering seeking a valuation of €7 billion ($7.6 billion) or more for Cubico. They are prioritizing a full divestment, although some potential bidders could be interested in only some of the assets, the people said, asking not to be identified as the plan isn’t public.
Cubico, which operates clean-energy assets, will likely draw interest of large sovereign wealth funds. A formal process could start within weeks, according to the people.
Deliberations are ongoing and details could still change, the people said. Representatives for OTPP, PSP, Bank of America and CIBC declined to comment, while Cubico didn’t respond to requests for comment.
Renewable energy companies have attracted strong interest from investors who are seeking more exposure into the sector amid the push for greener sources of power. Brookfield is seeking to acquire a majority stake in Neoen with a view to launch a takeover offer that would value the French renewable energy developer at about €6.1 billion. KKR & Co. offered in March to acquire German renewable-power producer Encavis in a €2.8 billion deal.
London-based Cubico was launched in 2015 by the current owners alongside Spain’s largest lender, Banco Santander, which sold its stake a year later. The company operates different technologies, including onshore wind, solar, batteries and transmission lines, according to its website. Its asset portfolio has 2.8 gigawatts of installed capacity in total, plus 450 megawatts under construction and a development pipeline of over 17 gigawatts.
Cubico operates in nine countries: the U.K., Spain, Italy, Greece, Mexico, Uruguay, the U.S., Colombia and Australia.
Ontario Teachers has assets of C$255.8 billion ($185.3 billion), and PSP Investments had C$264.9 billion in assets as of March 31.
