J-Power, a major Japanese energy company, has launched a $380 million bid for its Australian parter Genex Power, the only remaining specialised renewables and storage company listed on the local stock exchange.
The bid comes just over a year after the failure of a $346 million bid led by Skip Capital, the private investment firm of software billionaire Scott Farquhar.
That bid was pitched at 25c a share, and it appears that J-Power initially approached Genex with an offer of 24c a share, before agreeing to lift it to 27.5c a share, a 50 per cent premium to its most recent trading price. The board has recommended acceptance.
The bid might have seemed inevitable since J-Power was likely providing the bulk of the funds for some of Genex’ major expansion projects, including the 2 GW Bulli Creek solar and battery project in south Queensland, and the 258 MW wind extension to the Kidston pumped hydro project in the north of the state.
J-Power already holds a 7.72 per cent stake in Genex and has provided it with a $35 million loan. The bid is subject to an exclusive due diligence, but if confirmed the independent directors say they intend to recommend it to shareholders.
The Kidston pumped hydro project, sized at 250 MW with eight hours storage, will be the first new pumped hydro project to be connected to the Australian grid in 40 years when it is finished next year.
Genex late last year completed construction and started operating its first big battery, the 50 MW, two hour (100 MWh) Bouldercombe battery near Rockhampton, which it may expand in coming years.
Genex also owns the operating 50 MW solar farms at Kidston and at Jemalong in NSW. It has a long term power purchase agreement signed with Fortescue Metals for a 337.5 MW component of the proposed Bulli Creek solar project, and hopes to expand the first stage to 775 MW, depending on other talks.
J-Power holds a 50 per cent stake in that project, which is also contemplating a 400 MW, four hour (1600 MWh) battery project, the first of what could be multiple storage projects to be built at the site.
In a separate statement, J-Power said it had had “a strong and longstanding partnership” with Genex, including as a joint owner and developer of Genex’s key growth assets, the Kidston wind and Bulli Creek projects.
“We look forward to engaging constructively with the Genex Board to finalise a proposal which can be put to shareholders,” a spokesman said.
“Our proposal will accelerate investment in the future of Genex and renewables in Australia, with J-Power bringing the capital and operational expertise to fund and operationalise new developments.”
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