Japan’s J-Power launches $380m takeover bid for Australian renewable energy firm Genex Power

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By Colin Hay - 
Genex Power ASX GNX J-Power takeover

Japanese renewable energy specialist Electric Power Development (J-Power) has unveiled a $380 million takeover offer for Australia’s Genex Power (ASX: GNX).

The non-binding, indicative and conditional proposal from J-Power is aimed at acquiring all of the ordinary shares on issue in Genex that it and its associates do not already own.

The takeover is being undertaken by way of a scheme of arrangement for $0.275 in cash per Genex share.

The indicative proposal also contains an alternative structure, under which J-Power may make an off-market cash takeover bid for all Genex shares at $0.270 per share.

The indicative proposal follows a previous non-binding, indicative and conditional proposal from J-Power on 5 February 2024 at a cash price of $0.240 per Genex share under the scheme and $0.235 under the takeover offer.

The Genex board has told shareholders they do not need to take any action in relation to the indicative proposal, potential scheme or potential takeover offer at this time.

However, an independent committee of the board of directors of Genex – comprised of all members of the Genex board other than J-Power’s representative – has unanimously determined that it is in the best interests of Genex shareholders to progress the indicative proposal and allow J-Power to undertake confirmatory due diligence on Genex to assist it in providing a binding proposal.

Close working relationship

J-Power is a 50% joint development partner of Genex for its Kidston Stage 3 wind and Bulli Creek solar and battery projects and currently holds 7.72% of the Genex shares on issue.

The Japanese company also extended a $35m corporate loan facility to Genex in 2023, which remained fully drawn at 31 December 2023.

The J-Power takeover offer comes less than a week after Genex provided an extension to a 25-year solar power purchase agreement (PPA) with a wholly-owned subsidiary of Fortescue (ASX: FMG) for the up to 2-gigawatt Bulli Creek solar and battery project (BCP).

The BCP is being developed by Genex in partnership with J-Power, with Solar Choice as co-developer.

Fortescue agreement

Under the PPA, Fortescue would acquire 337.5MW of capacity from a large-scale first-stage solar farm at the BCP to utilise for the operation of a green hydrogen and green ammonia facility in connection with its Gibson Island project.

The conditions precedent for the PPA included financial closure of the BCP solar farm by 31 December 2024, as well as Fortescue reaching a Gibson Island final investment decision (FID) in respect of Gibson Island by 31 December 2023.

In December 2023, these dates were subsequently extended to 31 March 2025 and 28 February 2024, respectively.

On 29 February, Genex agreed to extend the sunset date for achieving a Gibson Island FID to 31 March 2024.

Both parties also agreed to extend the sunset date for achieving financial closure of the BCP solar farm to 30 April 2025.