Hexagon takeover of Ebony draws closer to completion
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Hexagon’s acquisition of hydrogen company Ebony Energy has hit a milestone after satisfying the minimum acceptance condition for the takeover bid.
The company has now received acceptances from shareholders representing 56.98 per cent of the voting power in the unlisted company, well above the 50.1 per cent minimum level.
Ebony’s board has unanimously recommended that its shareholders accept Hexagon’s bid in the absence of a superior proposal, which is considered to be unlikely.
While Hexagon Energy Materials (ASX:HXG) has received strong support from its shareholders, the all-scrip, off-market takeover remains subject to their approval at the upcoming general meeting next week.
The acquisition of Ebony, which holds the Pedirka hydrogen project in the Northern Territory, is a key part of the company’s plan to become a predominant clean energy and resource company.
The Pedirka project, located about 150km southeast of Alice Springs, will use a surface gasification plant to produce ‘blue’ hydrogen from coal for export and domestic markets with zero carbon emissions.
The next stage for Ebony is to undertake a major drilling program to establish a JORC compliant resource to underpin a pre-feasibility study to advance the Pedirka project.
Upon the completion of a positive PFS, it is expected that a full partnership with a gasification group would be entered into.
Demand for hydrogen as a clean source of energy is expected to grow as the world moves towards a low carbon economy.
This has been highlighted by Markets & Markets, which has estimated that the hydrogen market will expand from $US135.5bn in 2018 to $US199bn by 2023, with the highest compound annual growth rate in China, Japan, and Korea.
This article was developed in collaboration with Hexagon Energy Materials, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.