PERTH (miningweekly.com) – Global oil and gas major Shell has made a A$617-million takeover offer for ASX-listed commercial and industrial electricity retailer ERM Power.
Under the terms of the proposed offer, ERM shareholders would receive A$2.465 in cash for every share held, representing a 38.4% premium to ERM’s one-month volume weighted average share price.
The ERM board has unanimously recommended that shareholders accept the offer, subject to an independent expert concluding that the takeover offer was in the best interest of shareholders.
ERM is the second largest energy retailer in Australia, by load, and owns and operates two gas-fired power plants.
“This acquisition aligns with Shell’s global ambition to expand our integrated power business and builds on Shell Energy Australia’s existing gas marketing and trading capability,” Shell Australia country chairperson Zoe Yujnovich said.
“ERM will become our core power and energy solutions platform and this acquisition is a significant step forward in growing Shell’s integrated power business in Australia. Upon completion, we look forward to welcoming ERM’s staff and customers to Shell,” she said.
The acquisition has received Foreign Investment Review Board and Australian Competition and Consumer Commission approvals, with Shell’s offer still subject to court approval as well as ERM shareholder approval.
ERM’s major shareholder, Trevor St Baker, who holds a 27.39% interest in the company, has confirmed that he would vote in favour of the scheme of arrangement, in the absence of a superior offer.
The acquisition is expected to be completed before the end of 2019.