A successful bid by Ecotricity to take over the remaining shares in Good Energy would send the retailer “backwards,” the chair of the latter has warned.
Earlier this month, Ecotricity published its offer document containing the full terms and conditions along with the associated form of acceptance that was also sent to Good Energy’s shareholders.
The offer will initially be open for acceptance until 1pm on 10 October although this deadline may be brought forward.
This morning (18 August), however, Good Energy has published a response circular rejecting offer from Ecotricity of 340 pence per share.
In the circular, Good Energy’s board outlined four key reasons why it believes shareholders should reject the offer from its rival.
These include the fact it believes Ecotricity is an “unfit owner with an unsuitable plan” and that the “hostile and highly opportunistic” offer significantly undervalues the company.
Additionally, Good Energy said it is successfully delivering on its modern, digital strategy which is very different to Ecotricity’s “out-dated, centralised business model”. It further added that it is in a “great position for accelerated growth”.
The board said it has received written confirmation from six shareholders, representing approximately 10.96 per cent of the company’s issued share capital, that they do not intend to accept the offer.
Those written confirmations, it said, represent approximately 15.30 per cent share capital when aggregated with the shares held by the directors who will also not be accepting the offer.
Good Energy chair Will Whitehorn said Ecotricity wishes to make its rival a renewable generation developer again, an approach it moved away from a number of years ago in favour of supporting small-scale renewable generators through long-term power purchase contracts.
He added: “Ecotricity believes we can compete more effectively together as genuinely green suppliers in a market of similar-looking products. This is something Good Energy is already effectively doing by itself, as the only supplier with Uswitch Green Tariff Gold Standard accreditation for all its tariffs.
“Ecotricity has been a loss-making business for the past four years. Its claim that they consider us ‘sister companies, with more in common than separates us’, is contradicted by their history as a disruptive shareholder, voting down 100 per cent of our proposed special resolutions.”
Additionally, Whitehorn said while Good Energy is committed to “high standards of corporate governance”, Ecotricity in contrast has offered “little insight” into its own corporate governance and how the businesses would be run going forward.
He continued: “The board believes that if this takeover were successful and the company de-listed, key decision making would ultimately rest with one individual which would not be in the best interests of the company and its stakeholders.
“Such a takeover would place the collective interests of our investors and customers in combatting the climate crisis into the hands of one individual.
“We, the board, believe Ecotricity would take this company backwards. Those directors who hold Good Energy shares will not be accepting the offer.”
Ecotricity has yet to respond to a request for comment.