Leaf Clean and Trading Emissions merger blocked at the altar

A proposed merger between environmental investment companies Trading Emissions and Leaf Clean Energy is off, after the firms failed to secure adequate shareholder support.

The merger, originally announced on 17 December last year, was subject to shareholder approval. The firms needed the holders of 75 per cent of their equity to approve the deal, but only received 62 per cent support at a meeting late last week.

The shortfall was the result of a single major shareholder withdrawing its support for the deal, according to a statement from Trading Emissions.

"While a merger with Leaf Clean Energy Company presented an opportunity to quickly enter North America, the company is still committed to pursuing this market and will now target investments in the US as well as Europe and Asia to build a truly global carbon focused business," Trading Emissions said.

According to reports, Moore Capital, a major shareholder with 32 per cent of each company's equity, withdrew support for the deal after previously endorsing it.

Clean Leaf Energy moved to shore up investor confidence in the firm as the deal's collapse was announced. It noted a "significant deterioration" in its share price over the past few months, and announced a $27m (£17.5m) buyback of its shares.

"At the maximum price, this would equate to 14.6 per cent of the issued share capital of the company," it said, adding that it would contemplate a further $20m buyback, depending on asset realisations and general market conditions.

"The board of Leaf Clean is confident of the company's ability to continue to execute its strategy on an independent basis," the company continued in a statement. "Leaf Clean has a well diversified portfolio of 11 investments across a range of clean energy sectors including biomass, waste-to-energy, solar and wind with a balance between technology and project related investments. The company has made an aggregate investment of $200m. Including funds committed to develop the existing portfolio, the company is now substantially invested."