Viridian has agreed a £1.62 billion (€2.4 billion) takeover by Bahrain-based investment group Arcapita. Claire Shoesmith reports.

The news follows a statement on Thursday that the company, Northern Ireland's main supplier of electricity, had received an approach that may lead to an offer.

Under the terms of the agreement, Arcapita's ElectricInvest unit will pay a total of £13.25 (€19.67) per share - a premium of 23 per cent above the closing price on Wednesday, the last business day prior to the announcement that an approach had been made.

The offer comprises a basic payment of £13.25 a share, plus an additional dividend of 11 pence in respect of the group's performance in the six months to the end of September.

Asim Zafar, an executive director of Arcapita, formerly known as First Islamic Bank, described the acquisition as a "perfect fit". The company, which has operations in Bahrain, London and Atlanta, invests in real estate, infrastructure and energy assets, and venture capital projects with what it calls "an ethical stance".

Mr Zafar said Arcapita had been attracted by the stable returns generated from what is largely a regulated business. "We look forward to working with Viridian's strong management team in further developing its electricity business in Northern Ireland and the Republic, as well as in growing its other activities," he said.

While this is Arcapita's first foray into Ireland, it isn't a newcomer to the energy market. In 2004 it bought South Staffordshire water in the UK. It is also one of three investors in Zephyr Investments, which operates a portfolio of wind farms.

Mr Zafar said Arcapita will adopt a hands-off approach to Viridian.

"We see a lot of opportunities, but we won't be doing anything different," he said, adding that Viridian won't be broken up. "The whole dynamics in Ireland are extremely interesting and exciting for us."

Mr Zafar said he believes there is significant growth potential for Viridian, in particular as far as power generation in the Republic is concerned. Viridian, which operates the Huntstown power station in Dublin, currently only serves corporate customers in the Republic.

Shares in Viridian, which jumped 12 per cent on the news of a speculative bid on Thursday, closed up 7.9 per cent in London yesterday, at £13.18.

Jack Gorman, an analyst at Davy, said that at a 40 per cent premium over Viridian's average closing price over the last six months, the offer was attractive for shareholders. It is also at a level that makes it unlikely that a rival bidder will surface.

Viridian said it was "fair and reasonable" and reflected the substantial value in the business.