Join our daily newsletter At The Bell to receive exclusive market insights
- The Supreme Court of New South Wales has approved Shell Australia’s takeover of ERM Power
- This allows Shell to break into the electricity sector
- The scheme has now been lodged with the Australian Securities and Investments Commission, making it legally effective
- ERM shares are expected to be suspended from trading on the ASX at close of market today
- Shareholders will receive $2.42 per ERM Power share
Shell Australia’s takeover of ERM Power is legally effective after the court order was lodged with the Australian Securities and Investments Commission (ASIC).
The scheme of arrangement outlining the takeover was approved in the Supreme Court of New South Wales this morning before being submitted to ASIC.
ERM shares are expected to be suspended from trading on the ASX at the close of trading on November 12, 2019.
Shareholders will be paid a total of $2.42 per share, made up of a special dividend of $0.085 and a scheme consideration of $2.335.
ERM entered into the scheme arrangement in August, valued at approximately $617 million, which would see Shell buy 100 per cent of its shares.
ERM Power is the second-largest commercial and industrial energy retailer in Australia. It’s also an energy generator with a gas-fired power plant in Western Australia and another in Queensland.
The takeover allows Shell Australia, which in heavily involved in oil and gas development and production, to break into the electricity sector.
“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,” said Shell Australia’s Country Chair Zoe Yujnovich.
“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 continued.
Shareholders approved the scheme last week, with 95.29% of ERM shareholder votes in favour of the acquisition.
Payment for the special dividend is expected to be made by November, 25 and payment of the scheme consideration by November, 20.
ERM’s share price is up slightly at 3:50 pm AEDT with shares trading for $2.42 apiece.
