An energy company with assets in Australia has emerged as the party that has been running the ruler over Genex Power, as it contemplates putting forward a rival offer for the business.
Scott Farquhar’s Skip Essential Infrastructure Fund, which is run by his wife, Kim Morrison, and infrastructure investor Stonepeak came forward with an offer for the business in the past fortnight.
They offered 23c per share, valuing the target at $300m.
But the offer from the entity of Mr Farquhar, co-founder of software giant Atlassian, and Stonepeak was rejected by the company board, which did not grant due diligence.
Shares on Thursday closed more than 2 per cent lower to 21.5c.
Whether the suitors return to the negotiating table with a higher bid remains to be seen.
In the meantime, DataRoom has learned that a group has been making inquiries around the market about launching a rival bid for the business that operates here and is not private equity.
Among the Australian groups that own power assets on Australia’s east coast and could be the mystery group are Shell, Iberdrola, Tilt Renewables and Engie.
EnergyAustralia is an existing customer of Genex, and has also been looking for buyers for part of its business.
While some suggest it may be interested in acquiring Genex, others say that a deal would not make sense because it is an existing Genex customer with an offtake agreement locked in for its Kidston Pumped Storage Hydro Project in north Queensland.
Alinta could be interested, but is thought to be an unlikely bidder while Origin Energy and AGL Energy are not thought to be interested, and APA Group would be unlikely to bid, despite looking at a number of targets in the energy space of late.
It would be a bold move for another party to come forward with an offer, given that Skip already owns a stake in the business of about 19 per cent.
Genex has a diverse portfolio of more than $1bn of renewable energy generation and storage assets across Australia, including the Kidston Pumped Storage Hydro Project that has the potential to power up to 100,000 homes during peak demand periods from 2025, adding up to 300 megawatts of electricity storage.
The project is expected to be finished in 2024.
EnergyAustralia has signed a binding energy storage services agreement, with the deal lasting for up to 30 years.
It is an attractive target because it is the only pure play renewable energy and storage company remaining listed on the Australian Securities Exchange.
Japanese power producer J-Power has 8 per cent of the company after purchasing a 10 per cent stake in Genex last year, and any winning bidder would likely need its support.
J-Power is a joint venture partner on Genex projects.
Should a rival suitor emerge, it may improve its chances of gaining control of the company by winning over its Japanese investor.
Stonepeak and Skip Essential are advised by Jarden and RBC, and Genex is advised by Goldman Sachs.
Sims could reap windfall from land sales
Some in the market believe that Sims needs to put some more thought towards selling more assets.
Bids due for BGC building materials empire
The contest is well under way for parties to buy the $800m BGC building materials business based in Perth.