The takeover battle between Britain’s two oldest established, pure-play integrated renewables generator-retailers intensified today, as Good Energy’s board announced it had unanimously rejected a £56 million cash-only bid by Dale Vince’s Ecotricity.
Vince’s Stroud-based generator-supplier owns 25.1% of its rival. Ecotricity’s non-binding bid on 2 July was its third since 15 June, it emerged today. Bids one and two represented premiums of 10.1% and 16.2% respectively to the target’s share price at the time.
Its latest offer, Ecotricity claims, is 59.4% above 213.3 pence, which the bidder says is its target’s average volume-weighted share price for twelve months to 9 July.
Only this morning’s full cash offer for all Good Energy’s equity triggered disclosure under LSE rules.
Outlining its bid this morning, Ecotricity confirmed its three escalating bid had been ‘indicative only’, and no guarantee existed that it will bid again.
Issuing this morning’s rejection, the board of Chippenham-based Good Energy cited three reasons for binning Ecotricity’s latest billet-doux:
- “It is inadequate and fundamentally undervalues the (GE) Group and fails to recognise the intrinsic value of the Group’s shares”
- The statement continued: “Good Energy’s shareholders are not being offered anything like a full premium for giving up control of their company. Ecotricity’s possible offer represents a premium of just 10.6% over the price of the Company’s shares on 9 July 2021 and a premium of just 26.6% over the volume weighted average price of the Company’s shares over the last 3 months; and
- “The Group has demonstrated its ability to deliver value to its shareholders and is committed to continuing to do so”
By noon today, a 7.32% advance on its share price valued Good Energy at £51.2 million.
Strongly advising GE shareholders to take no action, the target’s chair Will Whitehorn was defiant this morning:
“Good Energy and its subsidiary Zap – Map have an extremely healthy, independent future focused on the best interests of our customers, employees and shareholders.
“We are committed to delivering growth for the exclusive benefit of our shareholders, not Ecotricity’s,” said Whitehorn, until December 2010 president of Richard Branson’s Virgin Galactic.
Founded in 1999 by climate scientist Juliet Davenport, Good Energy owns two wind farms, six solar farms and sources other electricity from 1,600 independent generators. Davenport was awarded the OBE in 2013 for her work in renewables.
In its last published accounts, Good Energy returned a slim £0.395 million pre-tax profit on £ 130.7 million sales. Ecotricity’s equivalents are £6.6 million pre-tax losses on £222.3 sales.
