Shareholders in Genex Power have given a resounding all-clear for the $380 million takeover of the company by J-Power, sending the country’s only listed pure-play renewables developer into Japanese hands.
Almost 95 per cent of votes cast by Genex shareholders were in favour of the 27.5¢-a-share scheme offer, comfortably beating the 75 per cent minimum required.
Including debt, the offer values the Queensland-based developer of pumped hydro, battery and solar projects at about $1.04 billion, according to CGI Glass Lewis, one of the proxy advisers that recommended investors back the transaction.
The support for the deal revealed on the eve of the vote from Skip Capital, which owns 19.9 per cent of Genex shares, gave a huge boost to the chances of the transaction securing approval. Skip is owned by Atlassian co-founder Scott Farquhar and his wife and business partner Kim Jackson, who is CEO.
Opposition from Skip, which had previously bid for Genex at 25¢ a share, would probably have led to the deal being defeated. Skip bid in partnership with Stonepeak Partners in 2022, but the pair walked away after four months of due diligence.
Genex’s biggest project is the 250-megawatt, eight-hour Kidston pumped hydro storage venture being built at the site of an old gold mine near Townsville at a cost of $777 million.
The takeover is the latest acquisition by Japanese players of energy targets in Australia, where overseas companies are investing heavily as they tap the growth in clean energy here and work to achieve corporate emissions reduction objectives. It brings to an end Genex’s nine years as a listed company, following predecessors such as Infigen Energy and New Energy Solar into overseas or private hands.
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J-Power, known formally as Electric Power Development Co., is one of Japan’s largest energy utilities and already holds about 14.6 per cent of Queensland-based Genex under an off-market takeover offer it was running in parallel with the scheme of arrangement process.
The Tokyo-based firm is also a partner in two projects with Genex, a 258 MW wind farm expansion at the Kidston site near Townsville and the 2-gigawatt Bulli Creek battery and solar project west of Toowoomba.
Genex chairman Ralph Craven told shareholders at the meeting that the recommendation from independent directors to vote in favour of the offer took into account the value and certainty of the all-cash deal, relative to Genex’s long-term fundamental value. He also highlighted the risks of delivering Genex’s pipeline of projects and reminded shareholders that the company would need more capital to fund them.
Independent expert Grant Thornton assessed the transaction as “fair and reasonable”, valuing the stock at between 22.3¢ and 29¢.
While recommending shareholders back the offer, Glass Lewis criticised Genex’s lack of disclosure on the process it went through to review the strategic transaction, and on any negotiations it might have had with third parties, and with J-Power.
“We note that the lack of such disclosure is unfortunately typical in this market,” the firm said, adding that shareholders “could have benefited from additional information in this regard”.
Shares in Genex, which will cease trading on July 22, closed up 1.9 per cent at 27.5¢, matching the deal price.