Bridgepoint in early talks over Energy Capital Partners deal

Bridgepoint confirmed late on Monday that it is evaluating a number of potential strategic opportunities, including the possible acquisition of Energy Capital Partners.

Responding to a Bloomberg report earlier in the day, it said: "All such discussions, including those held with Energy Capital Partners, remain at an early stage and there is no certainty that any transaction will result."

Bridgepoint said further announcements will be made if appropriate.

Bloomberg had suggested that Bridgepoint was looking at paying about $1bn in cash and shares for ECP.

Broker Peel Hunt said: "We believe ECP, with circa $14bn of AUM (Bridgepoint has c.$24bn of fee-paying AUM), would make a good fit strategically with Bridgepoint in terms of sector and geographical coverage, bringing a much greater focus on energy and infrastructure.

"The two have Dyal (part of US-listed Blue Owl) as substantial minority shareholders. Any deal would carry risk but, structured correctly and implemented well, we believe it could add value. It would also bring greater size, which is becoming increasingly important."

Numis said: "As there are no published financials for ECP, it is hard to take a view on a potential deal from a value perspective at the mooted valuation, but we think it does seem consistent with Bridgepoint's stated M&A strategy of diversifying into other private markets assets (in this case real assets / infrastructure).

"It would almost certainly imply an equity and/or debt raise of some form, or equity issuance, given Bridgepoint's existing resources (FY22E: NTA £0.7bn, of which fund investments including notable new stake expected in Europe VII £0.7bn, cash £0.03bn and working capital/other -£0.04bn).

"It may or may not be a coincidence that ECP is another Dyal minority owned asset in our view. We also think it demonstrates continued industry appetite for renewables infra managers, and we would highlight potential positive read across to Foresight (roughly $11bn FuM and c.$0.5bn market valuation, i.e. c.80% the headline size and c.50% the mooted valuation)."