Genex Power shares surge on $300m takeover bid

Genex shares have surged after receiving a $300m takeover offer from a consortium headed up by the wife of Atlassian billionaire Scott Farquhar.

Kim Jackson, wife of Atlassian’s Scott Farquhar, heads up Skip Capital. Picture: Jonathan Ng

Shares in Queensland renewable energy developer Genex Power have surged nearly 50 per cent after the company confirmed it had received a $300m takeover offer by a consortium headed up by Atlassian billionaire Scott Farquhar.

Mr Farquhar’s investment fund Skip Capital, headed up by the tech executive’s wife Kim Jackson, has partnered with US private equity group Stonepeak Partners in the 23c a share bid, after building up a 19.9 per cent stake in Genex last week.

The cash offer was formally announced on Monday morning, sending Genex shares 48 per cent higher in early afternoon trade to 20 cents.

In a statement, the Genex board said the proposal was unsolicited and it had “not yet formed a view on the merits of the bid” or any potential further engagement with the consortium.

The offer is subject to a number of conditions, and would require Foreign Investment Review Board approval.

At 23 cents, it is close to double the recent traded price of Genex, which closed at 13.5 cents on Friday. The company’s share price has been on a steady decline since hitting 26c at the start of last year.

Skip and Stonepeak said the takeover bid reflected their “strong commitment to supporting the energy transition in Australia”.

Genex’s solar and hydrogen pump project at Kidston. Photo: Michael Chambers.

“The Skip Essential Infrastructure Fund and Stonepeak are passionate about achieving a successful transition to a renewable energy-powered future and believe Genex and its current management can play a major role in contributing to this outcome if backed by private, mission aligned capital,” the consortium said in a statement.

Genex is one of the few remaining listed renewable energy companies in Australia following takeovers of rivals including the $2.9bn sale of Tilt Renewables last year to a consortium led by AGL, the Future Fund and QIC.

The company’s main draw is its Kidston renewable energy hub in far-north Queensland, which includes a 50MW solar farm, 250MW hydro project, a further 270MW solar development and a 150MW wind farm.

Skip along with Mike Cannon-Brookes’ Grok Ventures emerged as backers of Genex in March 2021 after first ploughing money into the company’s $115m capital raising.

Ms Jackson said Skip had been a “supportive shareholder of Genex and we believe that long-term, private capital can help the company reach its full potential”.

“We see strong promise in Genex’s portfolio and together the Skip Essential Infrastructure Fund and Stonepeak bring the experience and insight required to allow Genex to play a substantially larger role in Australia’s energy transition,” she said in a statement.

Stonepeak, which is largely made up of ex-Macquarie executives, has about $US49.3bn of assets under management, and in July last year closed a $US2.75bn fund dedicated to renewables projects.

Its portfolio of energy and renewables assets includes onshore and offshore wind and solar assets. Its operational projects and others under construction have a combined capacity of about 500MW, and the firm has an 8GW development pipeline.

Genex on Monday also provided a quarterly update to the market, with revenue for the June quarter stronger than anticipated due to higher electricity prices.

Solar farms at Kidston and in Jemalong, near Forbes in central NSW, generated $8.6m in revenue for the company during the quarter, lifting full-year turnover to a record $26.1m.

It was also the first full year of positive operating cash flow, which came in at $4m.

The Kidston facility, west of Townsville, has signed up power giant EnergyAustralia to a 10-year deal to buy power from the facility with two further decade-long options available, including control of the plant’s operational and dispatch rights. Genex has received a $610m loan from the Northern Australia Infrastructure Facility and counts Japan’s J-Power as an investor.

Genex bought the old gold mine from mining major Barrick in 2014 for $1 after the facility had been shut down in 2001.

It aims to start up the hydro project in the second quarter of 2025, marking the nation’s first pumped storage hydro project in 40 years.

Genex has appointed Goldman Sachs as its financial adviser and Gilbert + Tobin as its legal adviser. The bidding consortium is being advised by Jarden and RBC Capital Markets with Allens providing legal advice.