Aquila European Renewables PLC on Friday said it has called off a potential combination with Octopus Renewables Infrastructure Trust PLC, following shareholder objection and a reconsideration by the company of its future options.

In December, the London-based investment company said it was considering a possible combination with another investing company, including FTSE 250-listed Octopus Renewables.

At current market caps, the combined entity would have a valuation of nearly £20 billion.

A process of due diligence for the deal commenced in February.

Aquila said that the indicative offers received would have represented an implied valuation ranging from a small premium to a discount to its current share price.

However, Aquila said that shareholders representing over 25% of the company’s voting rights have indicated their objection to any proposed combination.

In addition, Aquila said it believes a combination with another investment company ‘is not value enhancing when weighed against the other potential options open to the company’, adding that the financial costs of a merger would be prohibitively high.

As a result, Aquila has terminated its review of a proposed combination, and said it will continue to consider other options for the company’s future.

These include a wind-down with an orderly realisation of its assets, or a potential sale of some or all of its assets.

In Octopus Renewable’s announcement, the company said it would continue to focus on its strategic capital recycling programme, which has generated net proceeds of £97 million to date.

Shares in Aquila were down 2.3% at 60.00 pence each in London on Friday morning.

Shares in Octopus Renewables were down 0.6% at 74.95 pence each.

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