Eaga's biggest shareholder would not block takeover

Last week Eaga revealed it had been subject to an offer from an “independent strategic party” outside the energy industry, which led to a surge in its share price.

The Eaga Partnership Trust is Eaga’s largest single shareholder, holding approximately 37% of the firm’s shares on behalf of its beneficiaries. Its response to any takeover will be crucial in its success.

A statement released to the stock exchange confirmed the potential suitor backs Eaga’s strategy of fitting solar panels to homes in the social housing sector, which now has now progressed to the advanced stages of funding negotiations.

Eaga shares collapsed after the Comprehensive Spending Review, where funding for the Warm Front scheme was dramatically cut. At the time of the spending review, a statement from the firm quantified the extent of the hit and said: “Funding for the Warm Front programme for the 2010/2011 fiscal year is currently £345m and the statement today confirmed a budget of £110m in 2011/2012 and £100m in 2012/2013 which is materially lower than our expectations.”

Eaga shares lost more than a third of their value as a result of the cuts but have since recovered from a low point of 51.25p in December, to end trading on Friday at 92.75p.