Atlassian billionaire Scott Farquhar and his wife Kim Jackson have a fight on their hands in their efforts to take the solar and storage developer Genex Power private.
Skip Essential Infrastructure Fund, owned by Faraquhar and Jackson, along with Australian ex Macquarie bankers now running US-based private equity fund Stonepeak, grabbed a 19.9 per cent stake in Genex late last month in a market raid, and then made an “indicative offer” of 23c a share.
That offer was 70 per cent more than the previous trading price, and valued Genex at more than $320 million, but Genex directors have rejected it, saying it doesn’t reflect the full value of the company and its position in the market.
In fact, Genex has refused to even allow Skip and Stonepeak to have a detailed look at their books, although the directors are open to the bidders coming back with an improved offer.
Genex says it is in a unique position because it is the only pure-play renewable energy stock left on the Australian Stock Exchange, largely because – like Genex – the market has failed to value the companies appropriately.
Tilt Renewables, Infigen Energy and Windlab have all been taken private, while New Energy Solar was forced to sell its Australian solar farms, and is now selling parts of its US portfolio, to make returns to its shareholders.
Genex shares have nearly halve in the past year, despite a big boost in earnings from the volatile markets and the solid progress on its two biggest storage projects.
Its two operating solar farms – the 50MW facilities at Kidston and Jemalong – have made windfall gains in the last half year as they cashed in on the soaring electricity prices. Unlike most other facilities, they are not locked in to fixed contracts.
Genex says its 205MW/2000MWh Kidston pumped hydro project is on time and budget, and should be complete by 2025, as is its 50MW/100MWh Bouldercome big battery, due to come on line in late 2023.
It is also working on a 250MW wind project that could be added to the Kidston hub, along with a potential 270MW extension of its solar facilities there, and has a pipeline of other battery storage projects.
Genex says its unique position is enhanced by a portfolio of more than $1 billon of renewable energy generation and storage assets across Australia, including the first pumped storage hydro project to be developed in Australia in over 40 years.
It says all its assets are poised to benefit from the accelerating energy transition; and the market volatility.
“After careful consideration of the Indicative Proposal … the Board of Genex has unanimously concluded that the Indicative Proposal undervalues Genex and, therefore, is not in the best interests of the holders of Genex Shares (Genex Shareholders) as a whole,” the company said in a statement.
“Accordingly, the Board is not prepared to grant the access to due diligence requested by the Consortium on the basis of the Indicative Proposal.
“However, the Board is willing to engage constructively with the Consortium to explore whether the Consortium can submit a revised proposal that is capable of being recommended to Genex Shareholders by the Board. ”
It says it is prepared to provide limited due diligence information to help it develop a higher offer, although it notes there is no indication this will happen.
