Genex accepts $381m Japanese takeover offer

Genex, which is building one of the country’s biggest pumped hydro projects, has given the green light to a $381m takeover bid from Japanese energy giant J-Power.

Genex chief executive Craig Francis at the Kidston site.

Genex, which is building one of the country’s biggest pumped hydro projects, has accepted a $381m takeover bid from Japanese energy giant J-Power.

Under the deal announced on Friday, J-Power will acquire all the stock it does not already own in Genex for 27.5 cents per share in cash.

J-Power, which already owns nearly 8 per cent of Genex, has partnered with the renewable energy developer on two projects. Genex shares were placed in a trading halt Friday pending a “material” update to the bid from J-Power, which was first announced on March 4 and has been subject to multiple exclusivity period extensions.

The Japanese company has also offered a back-up offer to secure Genex in the event that not enough of Genex’s shareholders vote in favour of the bid. That would see J-Power offering a slightly lower amount of $0.270 in cash that is conditional on support from Genex shareholders owning at least 50.1 per cent of the company.

Genex has unanimously recommended the transaction to shareholders in the absence of a superior proposal and subject to the conclusions of an independent expert.

Genex is building a network of tunnels and caverns below two reservoirs, the remnants of the old Kidston gold mine in north Queensland.

The J-Power offer is the latest in a spate of Japanese companies moving into Australia’s broader energy industry, as Tokyo looks to tap the lucrative market and safeguard its energy security. The bid by J-Power underscores growing interest in Australian renewable energy developers, and Genex — the country’s last remaining listed such company — is also appealing due to its expertise in pumped hydro.

The deal is subject to a number of approvals, including from the Foreign Investment Review Board and Genex’ 19.99 per cent shareholder and former suitor Skip Capital, controlled by Atlassian billionaire Scott Farquhar.

Genex Power’s 250MW Kidston Pumped Storage Hydro Project on the site of the disused Kidston gold mine, northwest of Townsville.

Genex is close to finishing its 250MW Kidston pumped hydro project, which will be the first such development to be connected to the Australian grid in 40 years.

The project in a disused gold mine in Far North Queensland will house two giant hydroelectric turbines powerful enough to light up a city the size of Townsville.

It will form part of a green energy hub, which includes pumped hydro, solar and wind generation, that has been almost $800m and a decade in the making.

The Kidston mine operated between 1921-45 and 1984-2000 and at one stage was the country’s largest open cut gold mine. The mine’s historic battery remains on site albeit heavily damaged in a cyclone a few years ago.

Genex chief executive Craig Francis said the Kidston project’s relatively remote location, 380 km north west of Townsville, meant it had not faced the community opposition of other energy projects around the country.

But the drawback was the investment required to link the project to the rest of the national grid. A 186km transmission line between Kidston and Mount Fox northwest of Townsville will be built to distribute power from the project to the national electricity market.

The J-Power deal comes as Genex is scrambling to find alternate solar buyers for its proposed Bulli Creek solar farm in Queensland after key customer Fortescue allowed a key deadline to buy green energy for its stalled Gibson Island hydrogen plant to lapse.

The Andrew Forrest-led company has a deal with Genex for up to 337.5 megawatts of annual capacity from its proposed 2GW solar farm in October 2023, subject to a final investment decision. The deal underpins the first 450MW stage of the solar farm’s construction.