Good Energy board expands on rejection of Ecotricity offer

Renewable electricity supplier Good Energy released further information on Wednesday on its unequivocal rejection of a possible offer by Ecotricity Group, which was announced on 12 July.

The AIM-traded firm’s board said it had “carefully considered” the possible offer of 340p per share for its entire capital, which would be satisfied solely in cash.

It said it had unanimously rejected the possible offer, describing it as “inadequate”, adding that it “fundamentally undervalued” the group, and “failed to recognise” the intrinsic value of its shares.

The directors said they had fully considered this possible offer with the company’s financial advisor, Investec Bank, and remained unanimously of the view that the revised indicative offer materially undervalued the company, and that shareholders were not being offered “anything approaching an adequate premium” for giving up control of the company.

Ecotricity's possible offer represented a premium of 10.6% over the price of Good Energy’s shares on 9 July, and of 26.6% over the volume-weighted average price of its shares over the last three months.

“Good Energy has set out a clear direction for the business in recent announcements and is successfully delivering against this strategy,” the board said in its statement.

“The company's leadership team has demonstrated its ability to deliver value to its shareholders and is committed to continuing to do so, highlighted in a recent trading update on 22 June.

“We have continued to make excellent progress in positioning our business to benefit from increased demand for services which improve consumer experience in energy provision, which is a key focus for the government as it takes steps to facilitate its net zero strategy.”

The implementation of the firm’s new customer technology platforms, for domestic and business customers, had been successful and had provided Good Energy with an “enhanced route” to deliver all of its products and services to customers, the board explained.

“The group continues to invest in the development of energy services propositions and a range of innovation projects which help businesses and people support the journey to a zero-carbon Britain, and to drive future profit growth.

“Domestic and business billing platform integrations and smart meter rollout plans remain on track.

“Our mobility-as-a-service offering continues to develop solutions for the electrification of transport for business and domestic customers, with key partnerships signed and a further investment in Zap-Map committed.”

Good Energy said Zap-Map was the UK's leading electric vehicle mapping service, with more than 200,000 registered users, and over 95% of the UK's public charging points on its network and an estimated 75% of the UK's EV drivers having downloaded Zap-Map.

It said the subsidiary provided the company with “strong exposure” to the growing EV market, adding that the company had made “positive steps” in recent months to monetise the user-base.

Good Energy said there was an ongoing focus on delivering profitable returns alongside continued investment in people, processes and technology, to enable customers to take control of their energy usage in the future.

The board said it believed the group was executing against a “clear strategic plan” to deliver long-term value for shareholders.

“This is a highly opportunistic approach by a direct competitor to the company, which the board believes is not in the best interests of our shareholders, employees or customers,” said chair Will Whitehorn.

“We have a clear strategy, a strong leadership team and a proven track record in delivering on our objectives.”

The board said it was advising Good Energy's shareholders to take no action over the possible offer.

Under the City Code, Ecotricity was required to either announce a firm intention to make an offer or announce that it did not intend to make an offer by 1700 on 9 August.

At 1033 BST, shares in Good Energy Group were up 2.18% at 328p.