Genex share price jumps 38% on $381 million takeover bid

This renewable energy company could be leaving the ASX boards soon.

| More on:
a woman drawing image on wall of big fish about to eat a small fish

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Genex Power Ltd (ASX: GNX) share price is starting the week very strongly.

In morning trade, the renewable energy company's shares are up 38% to a 52-week high of 25.5 cents.

Why is the Genex share price surging?

Investors have been scrambling to buy the company's shares today after it received a takeover offer.

According to the release, Genex has received a non-binding, indicative, and conditional proposal from Electric Power Development (J-POWER).

The Japanese utility company has offered to acquire all of the ordinary shares on issue in Genex that it does not already own for 27.5 cents in cash per share by way of a scheme of arrangement. This represents a 48.6% premium to where the Genex share price ended last week.

This follows a previously undisclosed offer last month of 24 cents per share that was rejected by the company's board on the belief that it "undervalued Genex in the context of a change of control transaction."

In addition, the indicative proposal contains an alternative structure that will see J-POWER potentially make an off-market takeover bid for all Genex shares for 27 cents in cash per share.

If made, the potential takeover offer would be conditional on the potential scheme not being approved by the holders of Genex shares the scheme meeting and the fulfilment of the 50.1% minimum acceptance condition.

What now?

As things stand, the company's board has entered into a confidentiality and exclusivity deed with J-POWER and has provided it with access to a virtual data room for the purpose of facilitating due diligence.

It also advised that it would be willing to accept this current offer if it became binding.

However, it notes that Genex shareholders do not need to take any action in relation to the proposals. It also warned that there is no certainty that the provision of the due diligence access to J-POWER will result in a binding proposal.

The company intends to keep shareholders informed in accordance with its continuous disclosure obligations.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Mergers & Acquisitions

Woman holding out her hand, symbolising a trading halt.
Mergers & Acquisitions

Why has this ASX 300 stock just been placed in a trading halt?

This ASX 300 stock is sitting out today's trading thanks to some big news.

Read more »

a man in a hard hat and overalls raises his arms and holds them out wide as he smiles widely in an optimistic and welcoming gesture.
Resources Shares

This ASX mining services stock is exploding 65% on takeover news

Only one set of shareholders will be smiling on Tuesday.

Read more »

plummeting gold share price

Why is this ASX 200 gold stock crashing 7% on Monday?

Investors are bidding down this ASX 200 gold miner today following confirmation of media rumours.

Read more »

Animation of man and woman shaking hands on a deal on top of gold coins.
Mergers & Acquisitions

Which ASX companies are deploying dividends to secure a $1.9 billion deal?

Dividends appear to have sealed the deal for an ASX mega-merger.

Read more »

2 workers standing in front of a wind farm giving a high five.
Energy Shares

Origin shares fall despite 'highly strategic' $300m renewable energy acquisition

Origin is taking a big step in its clean energy transition.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Consumer Staples & Discretionary Shares

Ansell shares jump 14% amid blockbuster acquisition

Ansell is making a big acquisition and it could be a big boost to its earnings.

Read more »

A male ASX investor on the street wearing a grey suit clenches his fist and yells yes after seeing on his ipad that the Paladin share price is going up again today
Technology Shares

This ASX All Ords small-cap is soaring 33% on a takeover bid

This tech stock has received a takeover offer. But is it enough?

Read more »

Health professional putting on gloves.
Mergers & Acquisitions

Ansell share price hits pause as company gloves up for $975 million acquisition

Ansell shares won't be trading for a while...

Read more »