Power company Drax has reached a £548m deal to buy a solar and renewables company. Through its Drax Bidco vehicle, the company has agreed to acquire the Bluefield Solar Income Fund (BSIF), which holds a portfolio of solar, wind and energy storage assets. Under the terms, BSIF shareholders will receive 92.574 pence per share in cash plus an interim dividend of 2.25 pence.
Strategic growth in renewables
North Yorkshire-based Drax said the acquisition offers an attractive opportunity to grow its UK renewable generation business while being highly complementary to its existing operations and FlexGen portfolio. The deal is part of Drax's plan to allocate up to £2bn of incremental investment between 2025 and 2031 in flexible and renewable energy.
In the year to June 2025, BSIF generated underlying earnings of around £95m. Drax noted that the acquisition would reduce its earnings risk from grid connection delays.
CEO comments
Will Gardiner, CEO of Drax, said: “The UK’s energy system is rapidly evolving and to meet its changing needs Drax is transitioning too. We are excited about the opportunities we have to invest in growing our business and supporting the country’s long-term energy security by adding new sources of generation and storage to our portfolio.
“BSIF could potentially be the biggest acquisition our business has ever made. It represents an attractive opportunity to substantially grow our renewable generation business, while being highly complementary to the wider Drax Group’s existing operations and FlexGen portfolio. This deal can help meet the UK’s energy goals of security of supply, affordability and decarbonisation as rising levels of renewable electricity are expected to meet growing national power demand.”
BSIF board recommendation
Michael Gibbons, chair of BSIF, said: “BSIF was a pioneer in creating the first UK-listed investment trust focused primarily on UK solar energy infrastructure. Since its IPO in 2013, BSIF’s operating portfolio has grown with the UK solar PV market to approximately 850MW, including an expansion into onshore wind and battery storage.
“In that time, BSIF has delivered a total shareholder return of 122% and, as at BSIF’s most recent results, generates enough green electricity to power over 326,000 homes with renewable energy. None of this would have been possible without the resources and considerable expertise of Bluefield Partners, the investment adviser whose management of this company has established them as one of the leading experts in the renewables industry.
“However, since autumn 2022, a changed interest rate environment has contributed to BSIF shares trading at a consistent double-digit discount to NAV. Without fresh capital to invest in new projects, the portfolio’s quarterly NAVs have naturally declined with the payment of dividends.
“Against this changed backdrop, following an earlier evaluation of strategic options and shareholder feedback which indicated a clear preference for value maximising options, the BSIF board acted decisively to initiate a formal sale process. The BSIF board is pleased with the conclusion of this process and believes the acquisition at a 31% premium (including the permitted dividend) to the closing share price on November 4, 2025, represents a highly attractive outcome for BSIF shareholders and a compelling opportunity to crystalise value in cash. The BSIF board unanimously recommends that BSIF shareholders vote in favour of the acquisition.”
