Foresight Sustainable Forestry became the latest firm to join the exodus from the London Stock Exchange today, as it backed a £167 million offer from private equity.
Averon Park is buying the company and will delist it immediately after the deal goes through. It priced at 97p per share in cash and is expected to complete some time in the third quarter. FSF’s stock rose 22p to 95p today, a rise of over 30%.
FSF’s chairman, Richard Davidson, said the offer “represents good value for shareholders,” adding: “The structure of the deal means investors can continue to participate in the compelling investment fundamentals presented by the forestry and carbon credit industries through a private structure."
There were high hopes that the move toward unsustainable and green investing would open up the likes of forestry management as a new asset class, but moves toward a new market have faltered.
Averon said today that the level at which FSF’s shares have traded “since June 2023” has “prevented [FSF] from raising further capital to continue its growth as a publicly traded company and improve liquidity for investors.”
It pledged to “allocate further capital” to FSF and said it “will be better able to achieve its growth aspirations with better access to capital as a private vehicle, and thereby deliver its environmental potential.”
The deal comes amid wider concerns about low valuations on the London Stock Exchange after a long and steady decline in the proportion of UK-listed stocks bought by the country’s pension funds, limiting the depth of the pool of capital in the City.
Research undertaken for the Standard recently put the value of listed firms in the market exodus at £100 billion in what some commentators have called “the great fire sale of London”.
Graham Ross Russell, independent non-executive director of Averon Park, said: “Demand for domestic sources of timber and high integrity carbon credits is increasing, and the transaction presents good value for all involved and a great opportunity to grow the portfolio."
