SCHEDULE: Consortium Sweetens Offer for ReNew Energy Global to $8.00 Per Share, Extends Bid Agreement

A consortium including Canada Pension Plan Investment Board and Abu Dhabi Investment Authority has increased its non-binding offer to acquire ReNew Energy Global plc to $8.00 per share, representing a significant premium, and extended the exclusivity period for the bid.

Summary

• A consortium comprising Canada Pension Plan Investment Board, Platinum Hawk C 2019 RSC Limited, Abu Dhabi Future Energy Company PJSC-Masdar, and Sumant Sinha has submitted a revised non-binding proposal to acquire all outstanding shares of ReNew Energy Global plc not already owned by the consortium.
• The revised offer price is US$8.00 per share, payable in cash.
• This represents a 26% premium to the closing share price of $6.34 on December 10, 2024.
• It also represents a 39% premium to the 30-day volume-weighted average price of $5.76 as of December 10, 2024.
• The consortium has completed comprehensive due diligence, with remaining due diligence being purely confirmatory.
• The consortium expects the Special Committee to secure irrevocable commitments from certain major shareholders and directors (excluding founder and nominee directors) before announcing a binding transaction.
• Internal approvals for signing are anticipated within three weeks of finalizing transaction documents.
• The Consortium Bid Conduct Agreement, which restricts parties from engaging with other Indian renewable energy competitors, has been extended to September 30, 2025.
• The Abu Dhabi Investment Authority (ADIA) and its related entities beneficially own 58,170,916 Class A Ordinary Shares, representing 23.8% of the total 244,266,823 shares outstanding as of March 31, 2024.

Sentiment

Score: 7

Explanation: The sentiment is positive due to the increased offer price, significant premium, and the consortium's stated commitment to an 'expedient timeline' and 'clear path' to a binding transaction. The extension of the bid conduct agreement also signals continued dedication. However, the non-binding nature and the need for shareholder commitments introduce some uncertainty, preventing a higher score.

Positives

• Increased offer price of US$8.00 per share provides a higher valuation for shareholders.
• The offer represents a significant premium: 26% over the December 10, 2024 closing price and 39% over the 30-day VWAP as of the same date.
• The cash offer provides immediate liquidity and value certainty, mitigating public market volatility.
• Comprehensive due diligence has been largely completed, indicating serious commitment and progress towards a transaction.
• The consortium sees a clear path to a mutually agreeable transaction on an expedient timeline.
• Extension of the Consortium Bid Conduct Agreement to September 30, 2025, suggests continued commitment and a defined timeline for the acquisition process.

Negatives

• The revised proposal is explicitly a "final non-binding offer," meaning there is no guarantee of a definitive agreement.
• The transaction is contingent on securing irrevocable commitments from major shareholders and directors, which is a potential hurdle.
• Final internal approvals from the consortium are still required, which could take up to three weeks after documents are finalized.
• The offer price is based on information made available and due diligence findings, implying it may not increase further.

Risks

• The proposal is non-binding and may not lead to a definitive transaction agreement.
• Failure to obtain irrevocable commitments from major shareholders and directors could prevent the transaction from proceeding.
• The consortium's internal approvals, while expected within three weeks, are still a condition precedent to signing.
• The "confirmatory" due diligence, while described as such, could still uncover issues that impact the deal.

Future Outlook

The consortium sees a clear path to a mutually agreeable transaction on an expedient timeline and looks forward to working expeditiously towards the announcement of a binding transaction, subject to satisfactory agreement on transaction documents and final internal approvals within three weeks. The extension of the Consortium Bid Conduct Agreement to September 30, 2025, indicates a continued focus on this potential acquisition.

Management Comments

• The consortium is pleased to confirm its continued interest in the transaction and would like to thank you, the rest of the special committee and the management of the company, for your time and continued engagement.
• Subject to alignment on the points outlined below, the consortium sees a clear path to a mutually agreeable transaction on an expedient timeline.
• Our revised proposal would provide the company's shareholders with a 26% premium to the closing share price of $6.34 per share on December 10, 2024 and a 39% premium to the 30-day volume-weighted average price of $5.76 per share (as of December 10, 2024).
• The consortium believes that its revised proposal, which would provide shareholders with immediate liquidity and value certainty not available in public markets, would be in the best interest of the company and its shareholders, and the consortium trusts that it bears evidence of its willingness to take the transaction forward.
• The revised proposal is a final non-binding offer.
• The consortium expects the special committee, its advisors and the company to engage with top shareholders to ensure their support of the transaction.
• The consortium expects the special committee, its advisors and the company to deliver hard irrevocable commitments from certain major shareholders and from directors (other than the founder and the nominee directors of the consortium members) prior to the announcement of any binding transaction.
• The consortium can see a clear path forward and believes that, with your support, a successful outcome could be within reach.

Industry Context

This announcement reflects a continued trend of consolidation and strategic investments in the renewable energy sector, particularly in emerging markets like India. Large institutional investors and sovereign wealth funds are actively seeking to acquire established platforms to gain exposure to the growing demand for clean energy. The consortium's focus on ReNew Energy Global, a significant player in the Indian renewable energy market, underscores the attractiveness of the region's growth potential and the strategic value of operational assets. The extension of the bid conduct agreement suggests a disciplined approach to M&A, ensuring focus on the target without distraction from other potential Indian renewable energy opportunities.

Comparison to Industry Standards

• The proposed premium of 26% to the closing price and 39% to the 30-day VWAP is generally considered attractive in take-private transactions, often falling within the typical range of 20-40% premiums seen in similar deals for established renewable energy companies.
• For example, comparable take-private transactions in the renewable energy sector, such as Brookfield's acquisition of TerraForm Power in 2020 or various private equity buyouts of smaller renewable developers, have often featured premiums in this range, reflecting the value of operational assets and growth pipelines.
• The consortium's comprehensive due diligence, covering technical, commercial, financial, tax, and legal aspects, aligns with best practices for large-scale infrastructure and energy acquisitions, ensuring a thorough understanding of the target's assets and liabilities.
• The requirement for irrevocable commitments from major shareholders is a common de-risking strategy in take-private bids, ensuring sufficient shareholder support for the transaction's approval.

Corporate Governance

Related Party Transactions

• The acquisition proposal involves a consortium that includes Sumant Sinha, the Founder of ReNew Energy Global plc, who is a related party.
• The consortium also includes Platinum Hawk C 2019 RSC Limited, which is an indirect wholly owned subsidiary of Abu Dhabi Investment Authority (ADIA), a beneficial owner of 23.8% of ReNew Energy Global plc's Class A Ordinary Shares.

Stakeholder Impact

• Shareholders: Potential for immediate liquidity and a significant premium (26% to closing price, 39% to 30-day VWAP) if the non-binding offer becomes binding and the transaction closes. Value certainty not available in public markets.
• Company (ReNew Energy Global plc): Potential to be taken private, which could lead to changes in strategic direction, operational focus, and access to capital, potentially reducing public market scrutiny and compliance costs.
• Management/Employees: While not explicitly stated, a take-private transaction often leads to organizational restructuring, which could impact management roles and employee numbers.
• Consortium Members: Potential to acquire a significant renewable energy platform in India, expanding their investment portfolio and strategic presence in a high-growth market.

Next Steps

• Engage with the Special Committee on the draft transaction agreement to finalize it as soon as possible.
• Consortium's financial advisors to highlight specific remaining confirmatory due diligence items.
• Special Committee, its advisors, and the company to engage with top shareholders to ensure their support.
• Special Committee, its advisors, and the company to deliver hard irrevocable commitments from certain major shareholders and directors (excluding founder and nominee directors) prior to the announcement of any binding transaction.
• Consortium to seek internal approvals within three weeks of transaction documents being finalized.
• Work expeditiously towards the announcement of a binding transaction, subject to mutually satisfactory agreement on transaction documents and final approvals.

Key Dates

Recommendation

Keywords

ReNew Energy Global plc, RNW, Acquisition, Takeover Bid, Consortium Offer, Privatization, Renewable Energy, India, Canada Pension Plan Investment Board, Abu Dhabi Investment Authority, Masdar, Sumant Sinha, SEC Filing, Schedule 13D, Shareholder Value, Due Diligence, Non-Binding Offer