Trading Emissions PLC Share News (TRE)

Carbon trading business Trading Emissions and clean energy investment company Leaf Clean Energy are in merger discussions. The plan is to merge the two AIM-quoted businesses and transfer the enlarged entity to the Main Market. Trading Emissions would reverse into Leaf via an all share offer. The merger already has the backing of a number of shareholders. Shareholders owning 42.2% of Trading Emissions and 43% of Leaf promised to vote for the merger even before talks began. No firm bid valuation has been agreed as yet. At 99.5p a share, Trading Emissions is valued at £256.14m. Leaf is the smaller of the two companies - at 100p a share, it is valued at £183.63m. Both companies have strong balance sheets with cash in the bank. Leaf still had $168m in cash at the end of June 2009, although it has committed a further $65.6m of capital. Trading Emissions had just over £125m in cash at the same point but this is a cash hungry business. Trading Emissions intends to pay a 3p a share dividend in January 2010. The two companies believe that the merger would create a balanced portfolio of renewable energy and carbon-focused assets.