Zenith Energy in $150m takeover

Zenith Energy has entered a scheme implementation deed with Pacific Equity Partners, under which the company will be bought for $1.01 per Zenith share.

Pacific Equity-owned Elemental Infrastructure BidCo has proposed to acquire all of Zenith’s 149.4 million shares on issue in a deal that values Zenith’s equity at around $150 million, with enterprise value of approximately $250 million.

Zenith shares surged 38 per cent on the news to close at 96 cents per share.

Its directors have unanimously recommended shareholders vote in favour of the scheme, with chairman Doug Walker agreeing to vote his shares in favour.

Managing director Hamish Moffat and non-executive directors Peter Torre and David Riekie all intend to vote all of their controlled or owned shares in favour of the scheme, Zenith said.

Mr Walker and Hamish Moffat, along with chief operating officer Graham Cooper, will be able to elect to receive at least 66 per cent of their scheme consideration as scrip consideration, with the remainder as cash consideration.

Together, they hold approximately 23 per cent of total Zenith shares on issue.

Mr Walker said the proposal represented an excellent outcome for Zenith shareholders.

“It is a testament to our sustained growth in the Asia Pacific region led by our strong and experienced executive management team,” he said.

Zenith said it would explore the potential to pay a fully franked special dividend, which would be deducted from the scheme consideration.

The company has appointed PwC as financial adviser and Allens as legal adviser to the transaction.

Pacific Equity Partners is being advised by Highbury Partnership and MinterEllison.

PEP managing director Andrew Charlier said the company had a strong history in backing management teams in the remote power sector.

“With the additional firepower PEP can bring to Zenith, we are highly optimistic about the company’s future growth,” he said.

Zenith’s former local rival Pacific Energy was also acquired by a private equity fund in September last year.

QIC, formerly Queensland Investment Corporation, purchased the company for $1.085 per Pacific share, valuing the company at $470 million.