Zenith Energy’s (ASX: ZEN) board has welcomed a takeover bid from Pacific Equity Partners which values at $150 million (equity) or $1.01 per share.
Under the deal, Pacific Equity Partners’ subsidiary Elemental Infrastructure BidCo has proposed to acquire 100% of Zenith via a scheme of arrangement that gives Zenith an equity value of $150 million and an enterprise value of $250 million.
Elemental has offered Zenith shareholders $1.01 per share in cash, which is a 45.3% premium to Zenith’s last closing price of $0.695 per share on 6 March.
The offer is also a 45.5% premium to Zenith’s one-week volume weighted average price of $0.694 per share and a 40.5% premium to Zenith’s three-month volume weighted average price of $0.719 per share.
Zenith’s board has unanimously recommended shareholders vote in favour of the offer.
“The Zenith board believes the proposal from Elemental represents an opportunity for shareholders to receive compelling and certain value,” chairman of Zenith’s independent board committee Peter Torr said.
“The proposal delivers a significant premium and recognises the success of Zenith as a leading provider of reliable energy solutions in the Asia Pacific region.”
Zenith executive chairman Doug Walker echoed Mr Torre claiming to offer was and “excellent outcome” for shareholders.
Meanwhile, Pacific Equity Partners managing director Tony Duthie said Zenith has a “high quality portfolio” of power generation assets.
He added, Pacific Equity Partners looked forward to growing Zenith further.
Zenith Energy’s performance
Zenith Energy is focused on providing power in remote areas using a range of thermal and sustainable fuel sources.
The company has clients across Australia and South East Asia and generates 226MW in contracted build, own and operate power stations.
Currently, Zenith’s entire power generation capacity exceeds 384MW with an additional 450MW in future projects in the pipeline.
During the six months ending December 2019, Zenith boosted its revenue by 28.4% top $29.4 million.
Earnings before interest tax depreciation and amortisation improved 74% to $14.8 million in the same period.
One of Zenith’s notable projects was designing and constructing a 5.67MWp solar farm to power Independence Group’s (ASX: IGO) Nova nickel mine.
According to Zenith, it is the world’s eighth largest solar PV project to be integrated into a mining operation.
Shareholders reacted positively to the takeover bid, with Zenith’s shares rocketing more than 38% to trade at $0.965 before midday.