Scott Farquhar, the billionaire co-founder with Mike Cannon-Brookes of software company Atlassian, and his wife are taking their big step into the green energy transition, leading a takeover bid for solar developer and of Genex Power storage.
The “conditional and non-binding” offer was formally announced on Monday morning and values the company at about $320 million, and comes after a consortium led by Farquhar increased its combined stake to nearly 20 percent after from a foray into the market late last week.
The bid is led by Skip Capital, 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, about double the recently traded price of Genex, whose shares have halved in the past half-year despite rising revenue from high wholesale prices. Genex has noted the offer, but has not provided any advice. Its shares rose to around 20c.
It’s likely, given the recent stellar performance of its solar farms, and the fact that the company says construction of its battery storage and hydromassage projects are on time and on budget, that Genex will seek a highest offer
Genex’s value is that it is one of the few renewable energy companies listed in Australia, and Farquhar, Jackson and their team are taking advantage of the fact that its share price has halved over the last 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 project, the first to be built in Australia for almost four decades. .
It is also looking to build a 200MW wind farm as part of the Kidston renewable hub and has a portfolio of other battery storage projects in Australia.
Farquhar and Jackson’s interest in Genex dates back more than a year when they first took a small stake in a financing round for the pumped hydro project, then quietly raised it 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-driven future” and believe Genex and its current management can play an important role in contributing to that outcome if backed by private equity aligned with the mission.
Kim Jackson
“We have been a supportive shareholder in Genex and believe that long-term private equity can help the company reach its full potential,” said Jackson, a former Hastings Funds management executive.
“We see great promise in Genex’s portfolio and together the Skip Essential Infrastructure Fund and Stonepeak bring the experience and expertise to enable Genex to play a substantially larger role in Australia’s energy transition.”
Stonespeak senior managing director Darren Keogh, a former Macquarie banker based in Sydney, said his company believed Genex would be in an even better position to advance Australia’s secure and stable energy transition as a company private
“We are long-term thematic investors, focusing on sectors and companies that have lasting 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 $2.75 billion Stonepeak Global Renewables Fund (“GRF”), which is one of the largest unlisted renewable energy infrastructure funds raised in world level in 2021.
It says it has a broad portfolio of energy and renewable assets, including onshore and offshore wind and solar assets with approximately 500MW operating/under-construction capacity and an associated 8GW development pipeline.
A successful bid for Genex would represent the last major renewables developer in Australia to go public, following successful bids by Tilt Renewables, Infigen Energy and Windlab, and New Energy Solar’s sale of its two solar assets Australians
It means fewer opportunities for smaller investors to put money into clean energy technologies and also removes the rare windows into wind and solar farm operations offered by listed companies, which must disclose operational and financial information about their assets .
But Farquhar’s entry into the clean energy market means Australia’s three richest men – Farquhar, Cannon-Brookes and Andrew Forrest, according to the AFR Rich List – are now committed to the transition to green energy and throw their money at it.
Skip Capital describes itself as an investor in “future infrastructure projects” in areas such as wind, solar, waste processing, recycling, food and data infrastructure. He does not list his investments so far, but says he is looking for a CFO.
See also: Australia’s three richest men are spending their billions on the green energy transition
And: Solar farms reap spectacular returns as fossil fuels drive energy prices higher
Giles Parkinson is founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder/editor of EV-focused The Driven. Giles has been a journalist for 40 years and is a former business and deputy editor of the Australian Financial Review.