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Barclays to buy Swedish carbon trader Tricorona

LONDON (Reuters) - Barclays Plc agreed a 98 million pound ($142.4 million) cash offer for Swedish carbon credits trader Tricorona AB, giving a vote of confidence in the carbon market ahead of the expiry of the Kyoto climate pact.

Barclays said on Wednesday it was offering 8 Swedish crowns ($1.01) a share for Stockholm-based Tricorona, which specializes in sourcing, developing and trading offsets from greenhouse gas reduction projects in developing countries.

Barclays Capital, the bank’s investment arm, is already the most active trader in the $144 billion global carbon emissions market and the acquisition will extend its position. The bank said the deal would be accretive to earnings within a year of completion.

The offer, which the British bank said had been unanimously recommended by Tricorona’s board members, is at a 40 percent premium to the target’s closing price of 5.70 crowns on June 1, valuing it at 1.13 billion Swedish crowns.

Tricorona shares were up 2.25 or 39.5 percent at 7.95 crowns by 0900 GMT.

Other banks have also been investing in the sector, with JP Morgan last year agreeing to buy clean energy project developer EcoSecurities for 129 million pounds ($187 million).

Tricorona has a pre-2012 offset portfolio of 43.7 million tonnes and expects to receive a further 63.8 million offsets between 2013 and 2020, it said earlier this year.

Benchmark Dec-10 CER futures trading on the European Climate Exchange (ECX) were unchanged at 12.44 euros ($15.11) a tonne on Wednesday.

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CONFIDENCE BOOST

Analysts said the deal gives the market for carbon offsets under the Kyoto Protocol a much needed confidence boost as its future remains cloudy after 2012, the year the climate pact’s first leg expires.

Under Kyoto’s Clean Development Mechanism, in which Tricorona is a major player, companies can invest in projects in emerging nations and in return get offsets, called Certified Emissions Reductions (CERs), which can be sold for profit.

U.N. climate talks to extend Kyoto or agree a successor resumed this week, exposing a familiar rift between rich and poor nations that caused last December’s Copenhagen meetings to fail.

In March, Tricorona’s board rejected an all-share offer from Swedish energy and environmental firm Opcon AB that valued the group at just over 1 billion crowns.

“This transaction offers a better fit, especially given that Barclays is one of the most active participants in the carbon markets,” said Mirabaud analyst Gus Hochschild.

At least two analysts said London-based Camco International, one of the few remaining listed offset firms, could now be a takeover target and reiterated their “buy” ratings.

Camco declined comment.

The carbon offset sector has been a hive of M&A activity in recent months, with a proposed merger between Trading Emissions and Leaf Clean Energy blocked by a major shareholder earlier this year.

Consolidation in the carbon market has also spread outside the offsetting sector with Thomson Reuters agreeing to acquire analysts Point Carbon last week and futures exchange group Intercontinental Exchange buying ECX operators Climate Exchange in April.

(Editing by Victoria Bryan and David Holmes)

($1=7.918 Swedish Crown)

$1=.8231 Euro

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