Ecotricity's hostile bid for Good Energy lapses without enough support

Wind farm in UK. Author: JAK SIE MASZ. License: Creative Commons, Attribution-ShareAlike 2.0 Generic.

October 12 (Renewables Now) - Ecotricity's sweetened hostile buyout bid for British renewable power and gas supplier Good Energy Group Plc (LON:GOOD) lapsed on Friday as the suitor did not secure the minimum required level of acceptances.

The bidder, which already owns 25.1% of the target company, obtained the backing of independent shareholders representing just 11.5% of Good Energy's share capital before the offer's deadline. Ecotricity's combined resulting ownership of about 6.1 million shares, or 36.5%, was below the minimum threshold of at least 50%. The offer valued the whole business at GBP 69.9 million (USD 95.3m/EUR 82.4m).

In a separate statement, Good Energy was upbeat about the outcome, having repeatedly fended off its rival's approaches since July. It said the lukewarm acceptance of Ecotricity's proposal was a testament to strong investor support for its previously stated strategy.

Ecotricity is owned by UK green energy entrepreneur Dale Vince's vehicle Green Britain Group. It sweetened its bid for Good Energy to GBP 4 per share from GBP 3.4 per share in September, being faced with feeble investor support for the takeover.

Good Energy followed up with a trading update on Monday, reaffirming its full-year expectations. The company also noted that it is over 90% hedged for the next 12 months. This is expected to limit its exposure to the ongoing turmoil in the UK energy market, which has led to the collapse of at least ten small energy suppliers. Good Energy buys from over 1,600 renewable generators in Britain and has a portfolio with a 47.5-MW generation capacity.

"Despite the recent volatility in wholesale energy prices, we remain positive on the long-term opportunity in our chosen markets. Recent electric vehicle sales data proves the acceleration of adoption and reinforces the scale of opportunity for Good Energy in this market," CEO Nigel Pocklington said.

(GBP 1 = USD 1.364/EUR 1.178)

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