04-March-2024: Genex-receives-NBIO-from-J-POWER.PDF
GNX is up +32.4% (to 24.5 cps) at this point today, however they've been as high as 25.5 cps this morning, which was +37.8% above their 18.5 cps close yesterday. This non-binding, indicative and conditional proposal from Electric Power Development Co., Ltd. of Japan (J-POWER) to acquire all of the ordinary shares on issue in Genex that J-POWER and its associates do not already own (by way of a members’ scheme of arrangement) is priced at A$0.275 in cash per Genex Share, and also contains an alternative structure, under which J-POWER will potentially also, concurrently with the Potential Scheme, make an off-market takeover bid for all of the Genex Shares for A$0.270 in cash per Genex Share.
The Scheme Consideration of 27.5 cps cash per Genex Share represents a:
- 49% premium to the last closing price of Genex Shares on the ASX of $0.185 (as at 1 March 2024, being the last trading day on the ASX before the date of this announcement);
- 56% premium to the 1-month (to and including) 1 March 2024 volume weighted average price (VWAP) of Genex Shares of $0.176;
- 58% premium to the 3-month VWAP of Genex Shares of $0.174; and
- 65% premium to the 6-month VWAP of Genex Shares of $0.166.
The first 4 pages of today's announcement are reproduced below. For the full announcement, click on the link at the top of this straw.
The remainder of the announcement can be viewed here: Genex-receives-NBIO-from-J-POWER.PDF
Genex has rejected takeover proposals in prior years, from Skip Capital and also from a consortium that included Skip Capital and others, and Skip Capital still owns 19.99% of Genex today. Japanese company J-Power has plans to get around that supposed blocking stake by Skip (explained below).
Skip Capital was founded by and is run by Atlassian co-founder Scott Farquhar and his wife Kim Jackson (pictured below), and they recently teamed up with private equity giant KKR to acquire Queensland Airports - see here: KKR teams up with Skip Capital for Queensland Airports; vets EastLink (afr.com)
The IBC (independent Board committee, so the Genex Board minus J-POWER’s representative and nominee to the Genex Board, Kenichi Seshimo) intends to recommend the transaction to Genex Power (GNX) shareholders - see pages 3 and 4 of today's announcement - reproduced above.
In this AFR article published today: J-Power taps MacCap, Minters to Skip-proof Genex Power bid (afr.com), they say this:
Genex Power’s 7.72% shareholder J-Power and its bankers at Macquarie Capital have baked in two safeguards in their Monday morning bid to combat Skip Capital’s 19.99% stake.
While J-Power stopped short of naming Scott Farquhar’s Skip Capital as the reason, it’s clear that’s what its advisers were thinking of when they rebooted the dual-track bid structure seen at Azure Minerals late last year.
Skip EIF Enterprises Pty Ltd owns 19.99% of Genex and in 2022, lobbed a bid to buy it for 25¢ a share with Stonepeak Partners before walking away. Of note, it hasn’t yet committed its stake to supporting J-Power’s bid.
The second set of safeguards – no talk, no shop, no DD – is much more customary. But Genex’s ASX announcement called out Skip and related entities as parties with whom interaction is prohibited during the four-week exclusive due diligence.
To be clear, there’s no suggestion Skip or another interloper is about to hit back with a competing proposal, but J-Power is watching its back. It’s already a 50% partner in Genex’s Kidston Stage 3 Wind and Bulli Creek projects and provided it with a $35 million loan facility last year.
As for Skip, it would be interesting to see what it does with its 19.99% stake. Selling into J-Power’s bid should get some tongues wagging on the Atlassian co-founder’s ambitions to support energy transition.
“We have been a supportive shareholder of Genex, and we believe that long-term, private capital can help the company reach its full potential,” Kim Jackson said at the time.
Goldman Sachs is advising Genex.
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Source: https://www.afr.com/street-talk/j-power-taps-maccap-minters-to-skip-proof-genex-power-bid-20240304-p5f9jg
[by Sarah Thompson, Kanika Sood and Emma Rapaport, Mar 4, 2024 – 12.12pm]
Genex is building the Kidston Clean Energy Hub on the site of the old Kidston gold mine.
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Further Reading: Why Scott Farquhar, Kim Jackson want to take Genex Power private (afr.com) [25-July-2022]
This is an interesting development today, and it's looking like a change of control transaction IS going to occur this time. I had expected Genex to get taken out at some point by a larger player, so this does not come as a surprise to me. I would have liked a higher price however, but a profit is still a profit.