Scott Farquhar, the billionaire co-founder with Mike Cannon-Brookes of software company Atlassian, and his wife are making their own big move into the green energy transition, leading a takeover bid for solar and storage developer Genex Power.
The “conditional and non binding” offer was formally announced on Monday morning and values the company at around $320 million, and comes after a consortium led by Farquhar boosted its combined stake to nearly 20 percent after a market raid late last week.
The bid is being led by Skip Capital, which is owned by Farquhar and his wife Kim Jackson, and includes US private equity firm Stonepeak, which is largely made up of former Sydney-based Macquarie Group executives.
It is offering 23c a share, around double the recently traded price of Genex, whose shares have fallen in half in the last half year, despite a boost in revenue from high wholesale prices. Genex has noted the bid, but given no advice. Its shares rose to around 20c.
It is likely, given the recent stellar performance of its solar farms, and the fact that the company says construction of its battery and pumped hydro storage projects are on time and on budget, that Genex will seek a higher bid.
Genex’ value is that it is one of the few remaining listed renewable energy companies in Australia, and Farquhar, Jackson and their team are seizing on the fact that its share price has halved over the past year despite its leading position in the market.
It already operates the 50MW Kidston solar farm in Queensland, and the 50MW Jemalong solar farm in NSW, and is building the 50MW/100MWh Bouldercombe battery and the 250MW, 2000MWh Kidston pumped hydro projectthe first to be built in Australia for nearly four decades.
It is also looking to build a 200MW wind farm as part of the Kidston renewable hub, and has a pipeline of other battery storage projects in Australia.
Farquhar and Jackson’s interest in Genex goes back more than a year when they first took a small stake in a funding round for the pumped hydro project, and then quietly boosted this to more than 11 percent in February this year as part of a share placement (at 15c) to help fund the Bouldercombe battery.
Skip Capital and Stonepeak said they are “passionate about achieving a successful transition to a renewable energy-powered future” and believe Genex and its current management can play a greater role in contributing to this outcome if backed by private, mission aligned capital.
“We have been a supportive shareholder of Genex and we believe that long-term, private capital can help the company reach its full potential,” said Jackson, a former senior executive with Hastings Funds management.
“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.”
Stonespeak senior managing director Darren Keogh, a former Sydney-based Macquarie banker, said his company believed Genex would be in an even better position to advance Australia’s safe and stable energy transition as a private company.
“We are thematic, long-term investors, focusing on sectors and businesses that have durable tailwinds and provide essential services to their communities, particularly across the energy value chain,” he said in a statement.
Stonepeak last year closed its first dedicated renewables fund, the $US2.75 billion Stonepeak Global Renewables Fund (“GRF”), which is one of the largest unlisted infrastructure funds dedicated to renewable energy raised globally in 2021.
It says it has an extensive portfolio of energy and renewable assets, including onshore and offshore wind and solar assets with an operating / under construction capacity of approximately 500MW and an associated development pipeline of 8GW.
A successful bid for Genex would represent the departure from the stock exchange of the last big renewable developer in Australia, following the successful bids for Tilt Renewables, Infigen Energy, and Windlab, and the sale by New Energy Solar of its two Australian solar assets.
It means fewer opportunities for smaller investors to put money in clean energy technologies, and also removes the rare windows into the operations of wind and solar farms provided by listed companies, who are required to disclose operating and financial information of their assets.
But the entry of Farquhar into the clean energy market means that Australia’s three richest men – Farquhar, Cannon-Brookes and Andrew Forrest, according to the AFR’s rich list – are now committed to the green energy transition and throwing their money behind it.
Skip CaptainHe describes himself as an investor in “future-aware infrastructure projects” in areas like wind, solar, waste processing, recycling, food and data infrastructure. It does not list its investments to date, but it does say it is looking for a chief financial officer.