Ecotricity has gone public about its pursuit of Good Energy, revealing it has made three bids to take over the company in the past month.
The Dale Vince-led company, which already owns 25 per cent of Good Energy, made its third non-binding offer of 340p per share on 2 July – representing a premium of 18.9 per cent to the closing share price the day before.
However, Good Energy’s board rejected the offer – which values the company at £56.6 million – last Thursday (8 July).
Ecotricity said in an update to the market this morning that its latest proposal “would represent compelling value and could give Good Energy shareholders the opportunity to sell their shareholding for cash”.
It now has until 9 August to make a firm offer or walk away.
The first approach came on 15 June, with a bid of 310p per share, just days after Ecotricity sold the remaining stake in its Electric Highway business to Gridserve. On 24 June this was upped to 330p a share.
Good Energy’s share price rose 7 per cent, to 330p, following Ecotricity’s announcement.
Good Energy’s board said it had unanimously rejected the bid which it described as “inadequate” because it “fundamentally undervalues the group and fails to recognise the intrinsic value of the group’s shares”.
Chair Will Whitehorn said: “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.”
The approach by Ecotricity has reignited tensions that have existed for several years. In 2017, after his firm increased its stake in Good Energy to 25 per cent, Vince tried to get himself appointed to the board. The directors retorted that this would be a clear conflict of interest and the proposal was eventually withdrawn.
In the year to 31 December 2020, Good Energy recorded a £395 million profit from £131 million turnover. Ecotricity’s latest accounts, up to the end of April last year, showed a £3.9 million pre-tax loss and a revenue of £230 million.