Isramart : JPMorgan Bids for EcoSecurities as U.S. Considers Cap and Trade

Isramart news:
Sept. 14 (Bloomberg) –JPMorgan Chase & Co. offered 122.9 million pounds ($203 million) for EcoSecurities Group Plc, topping a rival bid and signaling broader interest in trading pollution credits as the U.S. weighs a cap-and-trade program.

EcoSecurities, manager of the most emission projects overseen by the UN, rose as much as 12 percent in London trading after Carbon Acquisition Co., a wholly owned unit of New York- based JP Morgan, offered 100 pence a share in cash. That exceeds the 90 pence offered by EcoSecurities’s former president and would be the most paid for an emissions-trading specialist.

JPM Morgan is the fourth company this year to consider a takeover of Dublin-based EcoSecurities, whose stock has tripled since the start of the year. The interest from suitors including Electricite de France SA and Sweden’s Tricorona AB may show the long-term viability of emissions trading, said New Energy Finance analyst Aimie Parpia. The bid comes three months after a joint venture of Societe Generale SA paid an undisclosed amount for OneCarbon International BV to tap U.S. demand.

“It looks increasingly likely that we’ll see demand for Certified Emission Reduction credits from the U.S., and JPMorgan is taking a long-term position,” Parpia said in a telephone interview today. “It’s bullish for the long term.”

The JPMorgan bid is “fair and reasonable,” EcoSecurities said in a statement today. Shareholders representing 19.91 percent of the firm, including co-founder Marc Stuart and Credit Suisse Group AG, have pledged to accept the offer from the unit of JPMorgan, the second-biggest U.S. bank. More than 25 percent of EcoSecurities shareholders agreed to sell shares to Guanabara Holdings BV, the Dutch company set up by from Pedro Moura Costa to attempt a takeover bid.

‘Fairly Dramatic’

“They’d need to come up with something fairly dramatic,” Adam Forsyth, a London-based analyst at Matrix Corporate Capital LLP, said about Guanabara.

Guanabara said in a statement today it is reviewing its position. The company raised its July 17 bid for the emissions- trading firm on Sept. 1 after its earlier bid won limited support from shareholders. The Guanabara bid includes funding from BTG Investments LP, led by Andre Esteves, former head of fixed income, currencies and commodities at Zurich-based UBS AG. Moura Costa is a co-founder of EcoSecurities and served as president until resigning on April 23.

EcoSecurities creates and trades Certified Emission Reduction credits, or CERs, which are overseen by the UN. The so-called offset credits are part of the UN’s Clean Development Mechanism, the world’s second-largest carbon market, and can be used for compliance in the European Union’s carbon market, the largest greenhouse-gas trading program.

U.S. Demand

There will be demand for offsets from the European Union as well as the U.S., said Jerome Malka, managing director of the Societe General joint venture Orbeo, in June. A proposal by U.S. representative Henry Waxman would allow as much as 2 billion metric tons of offsets a year starting 2012.

The supply of CERs may fall to as little as 118 million metric tons this year from 138 million tons in 2008, said Alessandro Vitelli, a director at London-based IDEACarbon.

The UN is seeking this year to set international climate- protection laws starting 2013 to determine the fate of the Clean Development Mechanism of the 1997 Kyoto Protocol.

JPMorgan also owns Climate Care, a developer of carbon offset projects, which it bought in 2008.

EcoSecurities was advised by RBS Hoare Govett Ltd.

U.S. lawmakers are likely to reach a compromise on a new climate bill early next year, paving the way for implementation in 2012, analysts at Deutsche Bank said July 31.

The climate-protection law, written by Democratic Representatives Henry Waxman of California and Edward Markey of Massachusetts, would also establish a U.S. emissions-trading program. It calls for the government to cap emissions in industries responsible for 85 percent of U.S. greenhouse gas.