DUET swallows poison pill to deter Spark

Intelligent Investor

Independent Financial Research

DUET announced that it has made a $1.9bn takeover bid for Energy Developments (ASX: ENE), an operator of remote and green energy power generation projects. While DUET has attempted to rationalise the transaction, it looks suspiciously like a defensive manoeuvre. There aren’t many ‘synergies’ in this deal. DUET’s takeover of Energy Developments simply makes it larger and more diversified. The takeover will be funded by a $1.7bn capital raising, which obviously increases the number of shares on issue. In turn, the capital raising will seriously dilute Spark’s stake in DUET. This capital raising comes on top of another $400m equity issue in December, which had already diluted Spark’s stake to 12.4%. If Spark wanted to bid for DUET now, it would have to pay considerably more than $5bn. Last year DUET’s market capitalisation was approximately $3bn. Read the full blog: (VIEW LINK)

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Intelligent Investor
Independent Financial Research

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