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EDF Secures Below-market Purchase of Pod Point, Undermining Initial Ambitions

Investor expresses inevitability and disappointment over potential recommendation of EDF's bid, significantly lower than Pod Point's £350m IPO valuation.

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Investor in Pod Point shares impending, albeit disheartening, recommendation for EDF's...
Investor in Pod Point shares impending, albeit disheartening, recommendation for EDF's significantly undervalued bid compared to its £350m IPO valuation.

EDF Secures Below-market Purchase of Pod Point, Undermining Initial Ambitions

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The curtain falls on Pod's three-and-a-half year stint as a public company, as it teeters on the brink of a lackluster EDF takeover on Thursday. Sayonara, Stock Woes!

Our source whispers that Pod, now trading simply as Pod, is anticipated to drop a statement affirming its board's alignment with EDF's 6.5p-per-share bid. This offer, valued at roughly £10 million, spells doom for Pod's once-soaring stock that's taken a beating due to shifts in electric vehicle adoption rates.

Expect a notice from the troubled electric vehicle charging company, with operations sprawling throughout the nation, including in Tesco store parking lots.

Pod went public in November 2021, listing its shares at 225p, valuing the company at a whopping £350 million. Since then, shareholders riding the wave have been left reeling from sizeable losses.

Erik Fairbairn, Pod's founder and former CEO, sunk millions of his own dollars into Pod's initial public offering.

A prominent Pod investor lamented the acquisition recommendation as "inevitable but disappointing," given EDF's existing 53% stake in the business.

EDF had acquired a majority stake in Pod back in 2020, in a joint venture with Legal & General Capital. The investment titan, along with other significant city players like Schroders, still hold considerable shares in the company.

A Pod Point Group Holdings spokesperson declined to comment on Wednesday evening.

Electric Vehicle Takeover: A Breakdown of the Move

The History and Transition

  • Market Dominance: Pod, with over 250,000 charging points across the nation, maintains a commanding market presence. Its robust commercial connections include major automotive manufacturers, housebuilders, and fleet companies[1][4].
  • Monetary Struggles: Despite its impressive reach, Pod has battled to achieve profitability, facing increased competition, consumer uncertainty about electric vehicles, and surging operational costs, leading to an unsustainable business model[1][4].
  • EDF's Existing Stake: Before the acquisition, EDF controlled approximately 53% of Pod's issued share capital[2][4]. In the face of Pod's fiscal difficulties, EDF's full acquisition is seen as the lone viable option for the company's operational survival[1][4].

Justifying the Grab

  1. Monetary Stability: EDF deems full ownership vital for providing Pod with long-term sustainability and vital operational support, crucial for ongoing investment in charging technology and customer service[4].
  2. Strategic Gains: EDF perceives opportunities to better serve significant commercial customers through its Izivia expertise and boost product offerings for UK Home customers by merging EV services with other energy solutions such as heat pumps and solar panels[5]. EDF aims to capitalize on opportunities for cross-selling in both the B2B and B2C sectors and secure substantial cost savings, particularly in IT and central support services[5].
  3. Avoiding Administration: Without EDF's intervention, Pod risks administration due to its financial standing, making the acquisition an essential lifeline for the company[4].
  4. Market Conditions: Despite the UK government's Zero Emission Vehicle mandate, the acceptance of electric vehicles has proceeded at a snail's pace, hurting companies such as Pod[1]. This mandate obliges manufacturers to ensure 22% of their vehicle sales are fully electric; however, actual uptake has lagged behind expectations[1].

The acquisition is valued at approximately £10.6 million, offering shareholders 6.5 pence per share, representing a 24% premium to the closing price before the offer period began[4]. Following the acquisition, Pod will continue to function independently within EDF's Zero Carbon Homes division, preserving agility amid evolving market conditions[5].

Investors are bracing themselves as Pod, the electric vehicle charging company, is expected to announce its board's approval of EDF's £10 million takeover bid, marking the end of Pod's stock trading journey and signaling a departure from being a public company. After the acquisition, Pod's focus may shift from finance and investing to business strategies aimed at enhancing its operational stability, building on EDF's expertise in EV services, and capitalizing on opportunities for cross-selling in both the B2B and B2C sectors.

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