Power Play: Genex shares pop 45% on takeover bid from Atlassian founder’s VC fund

Two months after Mike Cannon-Brookes made an audacious but ultimately doomed takeover bid for AGL, his Atlassian co-founder and co-billionaire Scott Farquhar is making his own energy play with a $320 million tilt at ASX-listed Genex Power Limited (ASX: GNX).

Genex shares jumped as much as 50% on the news on Monday before closing 45% up at $0.195, still well below the takeover offer price of 23c per share, a 70% premium to the company’s share price last Friday..

Farquhar’s bid, in a consortium controlled by the family VC run by his wife Kim Jackson, has seen Skip Capital build up a 19.9% stake in Genex, including 11.2% holding acquired in March.  Around 9% of the business changed hands in two trades last week

US alternative asset manager Stonepeak Partners is also part of the indicative and non-binding bid for the 11-year-old renewable energy producer, whose assets include the five-year-old Kidston Solar Project, which generates up to 50MW of power. The company has also turned the Kidston Gold Mine into a 250MW pumped hydro facility. Government renewable energy body ARENA committed $47 million towards that project.

Genex also runs the 50MW Jemalong Solar Project at Forbes in western NSW, and has a deal with Tesla for its 50MW battery storage project near Rockhampton, Queensland.

Releasing its quarterly results to June 30 yesterday, Genex reported $8.6 million in revenue, with the total from solar farms for FY22 at $26.1 million, with net operating cash flow positive for the first time in a full year at $4 million.

Genex CEO,James Harding said both the Kidston Stage 1 Solar Farm and the Jemalong Solar Farm were able to take advantage of the recent uplift in wholesale electricity prices, to secure record revenue and cash flow.

“Our development focus has also turned toward the Kidston Stage 3 Wind Project which is the next stage of the Kidston Clean Energy Hub. During the period we formalised a Joint Development Agreement with our partner, J-POWER, which included a further $3M in committed funding for the project development activities,” he said.

“The project continues to progress in accordance with its development timeline, targeting a final investment decision in 2H CY2023.”

The Skip Capital bid for Genex is subject to several conditions, including due diligence and unanimous board support. it also needs Foreign Investment Review Board approval.

Genex has appointed Goldman Sachs as its financial adviser and Gilbert + Tobin as legal adviser for the bid.

“The Genex Board has not yet formed a view on the merits of the Indicative Proposal or any potential further engagement with the Consortium,” the company said in a statement to the ASX.

“There is no certainty that the Genex Board will engage further with the Consortium in relation to the Indicative Proposal or that the Potential Transaction (or any other transaction in relation to Genex and the Consortium) will proceed.”