Atlassian co-founder Scott Farquhar is going to have to dig deeper into his pockets if a planned $320 million takeover bid for Genex Power (ASX: GNX) is to succeed.
The Genex board has rejected the bid by the Farquhar-led Skip Investments consortium as it undervalues the alternative power generator which notes it has a diverse portfolio of more than $1 billion of renewable energy generation and storage assets across Australia.
Skip, a private investment fund led by billionaire couple Farquhar and his wife Kim Jackson, already had a 19.9 per cent stake in Genex prior to teaming up with US-based Stonepeak Partners to propose the takeover offer.
Although the offer price of 23 cents per Genex share was set at a 70 per cent premium to the closing price prior to the indicative proposal being announced, the board of the Sydney-based company says it is not in the best interests of shareholders.
“Accordingly, the board is not prepared to grant the access to due diligence requested by the consortium on the basis of the indicative proposal,” says the company in a statement to the ASX.
Genex, which listed on the ASX in 2015, has three power projects under way including its flagship Kidston Clean Energy Hub where it is transforming the former Kidston gold mine in north-west Queensland into a solar, wind and hydro power generating facility.
The company’s Bouldercombe battery project has secured contracts with Elon Musk's Tesla to create a large-scale 50-megawatt battery storage system near Rockhampton. Genex also operates the Jemalong Solar Project at Forbes in central western NSW, currently producing 50 megawatts of power.
Skip has stepped up its investments in renewable energy assets over the past two years, with Genex pegged as its largest play to date in this field.
Genex has held the door open for a higher offer from Skip by offering the consortium ‘limited due diligence information’ to help them frame a new proposal.
“Irrespective of whether the consortium provides a revised proposal, the board believes Genex has a highly attractive future as a dedicated renewable energy and storage company,” the company says.
Genex says its $1 billion portfolio includes the first pumped storage hydro project to be developed in Australia in over 40 years at its Kidtson project.
The company also notes that it is the only pure play renewable energy and storage company listed on the ASX with a ‘significant pipeline of renewable energy and storage growth opportunities’.
Genex shares edged closer to Skip’s offer price in early trading, rising 0.5 cents a share to a high of 22 cents.
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