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Ecotricity eyes Good Energy takeover

Good Energy has said Ecotricity's indicative offer was "inadequate". Image: Good Energy

Good Energy has said Ecotricity's indicative offer was "inadequate". Image: Good Energy

Ecotricity is to potentially make a bid for Good Energy, having made three indicative offers in the past month.

Ecotricity, which already owns a 25.1% stake in the clean energy supplier, made a non-binding indicative offer of 310.0 pence per share on 15 June, a second of 330.0 pence per share on 24 June and a third of 340.0 pence per share on 2 July. All three were rejected by Good Energy's board.

Good Energy described the most recent of these offers as “inadequate” in a statement released on the London Stock Exchange today (12 July). It said that the offer “fundamentally undervalues the Group and fails to recognise the intrinsic value of the Group's shares” and its shareholders are not being offered a full premium in return for relinquishing control of the company, with Ecotricity’s possible offer representing a premium of 10.6% over the price of the company’s shares on 9 July.

Additionally, Good Energy said it has demonstrated its ability to deliver value to its shareholders and is committed to continuing to do so.

Good Energy's share price closed at 307.50p on 9 July, but opened this morning at 333.0p per share.

Both companies were clear there’s no guarantee that Ecotricity will make an offer for Good Energy, however Ecotricity “believes that an offer at 340.0 pence per share would represent compelling value and could give Good Energy shareholders the opportunity to sell their shareholding for cash”.

Ecotricity can also make an offer on less favourable terms than 340.0 pence per share with the recommendation or consent of the Board of Good Energy, if Good Energy announces, declares or pays any dividend or any other distribution to shareholders, in which case Ecotricity will have the right to make an equivalent reduction in its offer terms or if a third party announces a firm intention to make an offer for Good Energy on less favourable terms than the possible offer.

An offer period has now opened, with Ecotricity required to either announce a firm intention to make an offer with Good Energy or announce it doesn’t intend to make an offer by 17:00 on 9 August 2021.

Will Whitehorn, chair of Good Energy, 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."

Current± contacted Ecotricity, however the company declined to comment.

While Ecotricity has owned a stake in Good Energy for a number of years, tension sparked between the two in 2017 - just after this stake increased to over 25% - when Ecotricity's founder Dale Vince launched a bid to appoint himself to the board of Good Energy as a non-executive director in 2017, a move which Good Energy said presented a “significant conflict of interest”.

In response, Vince cited concerns over corporate governance, calling into question payments made by Good Energy to solar developer Shire Oak Energy, established by then-CEO Juliet Davenport’s husband Mark Shorrock, stemming from 2013.

Good Energy hit back at these claims, stating its practices were sound and that all related party transactions were transparent and criticising the rival supplier's electric vehicle charging network, the Electric Highway, which was losing "hundreds of thousands of pounds a year".

Two weeks out from a vote on the proposals - which Good Energy urged its stakeholders to unanimously reject - Ecotricity withdrew its request.

It has since sold on the Electric Highway to GRIDSERVE, with Toddington Harper, CEO of GRIDSERVE, telling Current± “we wanted to have the freedom to take it in the direction that we wanted to take it” and that it was “good timing as well for Ecotricity”.

Meanwhile, Good Energy’s CEO Juliet Davenport stepped down earlier this year, with Nigel Pocklington taking over from 1 May.


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