Japanese Firm J-Power Initiates AU$380 Million Takeover Bid for Genex Power

Highlights:

• Japanese renewable energy leader, J-Power, proposes a AU$380 million takeover bid for Genex Power, signaling a significant development in the renewable energy sector.
• The proposal offers AU$0.275 per Genex share in cash, with an alternative bid structure at AU$0.270 per share, emphasizing J-Power's strategic interest in acquiring Genex.
• Genex's independent board committee unanimously agrees to advance the proposal, enabling J-Power to conduct confirmatory due diligence, indicating a potential shift in ownership dynamics within the renewable energy market.

Japanese renewable energy giant Electric Power Development (J-Power) has put forward a substantial AU$380 million offer to acquire Australia's Genex Power (ASX: GNX), marking a significant move in the renewable energy sector.

Proposal Details:

J-Power's proposal, although non-binding, indicative, and conditional, aims to acquire all outstanding ordinary shares of Genex that it and its associates do not already possess. The offer stands at AU$0.275 in cash per Genex share, with an alternative structure suggesting an off-market cash takeover bid at AU$0.270 per share.

Progression:

While Genex shareholders are advised to hold off on action for now, an independent committee of Genex's board has unanimously agreed to advance the proposal. This step allows J-Power to conduct confirmatory due diligence, facilitating the provision of a binding proposal.

Existing Partnership:

J-Power's relationship with Genex extends beyond this bid, as it is currently a 50% joint development partner for Genex's Kidston Stage 3 wind and Bulli Creek solar and battery projects. Additionally, J-Power holds 7.72% of Genex shares and extended a AU$35 million corporate loan facility to Genex in 2023.

Strategic Context:

The takeover bid comes shortly after Genex extended a solar power purchase agreement (PPA) with Fortescue Metals Group (ASX: FMG) for the Bulli Creek solar and battery project. This agreement, crucial for Fortescue's green hydrogen and green ammonia facility at its Gibson Island project, underscores the significance of Genex's projects in the renewable energy landscape.

Extension Agreements:

Genex and Fortescue mutually agreed to extend deadlines related to the PPA and financial closure of the BCP solar farm, demonstrating continued commitment to their renewable energy initiatives.

J-Power's move highlights the growing interest of international players in Australia's renewable energy market, signaling potential advancements and collaborations in the sector's future.

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