Novera avoids court, bidding war seen more likely

LONDON, April 1 (Reuters) - A major obstacle to a bidding war for wind and landfill gas company Novera Energy (NOEN.L: Quote, Profile, Research) was removed on Tuesday when the UK energy company sidestepped a court case scheduled for next week.

The overhanging court case -- over continuity of contracts with Waste Recycling Group in the event of a takeover of Novera -- had been a major issue stopping 3i Infrastructure (3IN.L: Quote, Profile, Research), which recently bought 10 percent of Novera's shares, making a formal takeover offer, a source familiar with the matter said.

Takeover rival Infinis recently bought 28 percent of Novera's shares, also at 90p per share -- valuing it at 112 million pounds ($221 million) -- but also has not tabled a formal offer.

"I think the company is worth more than 90p (per share)," said analyst Alex Ivanovitch at broker Kaupthing by phone.

"A higher bid is very possible. Potentially, there could now be a bidding war."

Novera said on Tuesday that Waste Recycling Group, on whose landfill sites Novera uses methane seeping from decomposing waste to generate electricity, had agreed to let another company continue the contracts in the event Novera gets taken over.

The parties had previously said they would go to the high court to settle the issue.

3i said in February it was prepared to pay 90p per share for Novera and it bought a 10 percent stake.

Since then Novera received a second takeover approach from landfill gas company Infinis, the waste-to-energy company owned by Guy Hands' private equity company Terra Firma [TERA.UL].