Under the terms of the offer Alkane shareholders will receive 36p per share (Source: Getty)
Alkane Energy's share price has soared more than 40 per cent this morning after Balfour Beatty revealed it was buying the smaller firm out for around £61.4m.
Balfour Beatty Infrastructure Partners (BBIP) is buying Alkane - which runs mid-sized gas to power electricity plants and has onshore petroleum licences that allow it to run coal mine methane sites extracting gas from old pits - through its purpose-created vehicle Barbican Bidco.
Under the terms of the offer Alkane shareholders will receive 36p per share, a 44 per cent premium on the closing price from yesterday's closing price of 25p. It is 59.5 per cent higher than the six month average closing price.
Alkane's share price was up 41.6 per cent at pixel time.
The directors of Alkane said the deal was "fair and reasonable" and intend to recommend unanimously that the offer be accepted.
Alkane chairman Roger McDowell said: "This offer enables Alkane shareholders to realise value today in cash for their shares at a significant premium to the recent historical share price, which, in the board's view, has been impacted by negative sentiment towards the energy industry and continued regulatory scrutiny.
"BBIP have a well-respected track record in the infrastructure sector and as a patient investor, will be able to support the company's longer term growth ambitions, building on its current portfolio of baseload CMM generation and power response sites. We believe that the offer is a good outcome for all Alkane stakeholders."
Rob Gregor, managing partner of BBIP LLP, investment adviser to BBIP, added: "BBIP is attracted to the flexibility and diversification of generation provided by the independent power platform of Alkane. We see great opportunity in the business and believe BBIP is an excellent partner to support the next phase of Alkane's development, and thereby contribute to the security of the UK power supply."