EPW - ERM Power

[rnr]

ERM's price has consolidated over the last 5 bars, TMF has moved higher and there is some bullish divergence to add to the mix!

 

[peter2]

EPW is looking more bullish as price is coiling under the 2.00 level. I've posted a monthly chart that shows price is struggling to go higher after the corrective abc pattern. The initial target is 2.50 if price gets moving, then 3.00.

 

[Porper]

A loose Cup & Handle pattern on the daily as well. Target $2.20

I hold.

 

[greggles]

Shell Energy Australia proposes to acquire 100% of the share capital of ERM Power for a cash price of $2.4654 per share, valuing the company at approximately $617million. The directors of ERM have unanimously recommended that ERM Power shareholders vote in favour of the scheme in the absence of a superior proposal.

ERM also released its FY2019 financial results today and they were pretty respectable:

Shell is obviously looking to diversify into power generation and ERM is a nice pick up for them. I think they got it at a good price at 5 x NPAT but a 38% premium isn't a bad result for shareholders either.

 

[Smurf1976]

Shell is obviously looking to diversify into power generation and ERM is a nice pick up for them.

It also amounts to vertical integration on Shell's part given ERM's involvement with gas-fired power generation and electricity retail whilst Shell itself is involved in the gas industry.

Owning more parts of the chain from resources in the ground to customer accounts provides a natural hedge to market fluctuations so there's an attraction in that.

 

[System]

On December 2nd, 2019, ERM Power Limited (EPW) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between EPW and its shareholders in connection with the acquisition of all the issued capital in EPW by Shell Energy Australia Pty Ltd.