EVgo shares jump 47% after buyout proposal from majority holder

what happened

A group including LS Power Equity Advisors and its affiliates has submitted a non-binding proposal to purchase all EVgo shares they do not already own at $2 each, according to Update. LS Power currently controls about 56% of the combined voting power of the electric-vehicle charging company.

EVgo said its board has set up a committee of independent and disinterested directors to review the offer. On Monday the stock closed up 47% at $1.85, with volume above 72 million shares. In a securities filing, the LS Power group said it has no interest in selling its stake or in any alternative change-of-control deal.

LS Power acquired EVgo from Vision Ridge Partners in 2020. The company listed publicly in 2021 through a merger with a special-purpose acquisition company.

why it matters

A take-private offer priced above the prior market level usually supports a stock, but its outcome depends on the committee's review and on whether LS Power is willing to raise its terms. Analysts at Stifel, UBS, RBC Capital and other firms have cut their price targets since early August, so the rally reflects a reassessment of the situation rather than an upgrade of forecasts.

market impact

EVgo shares: the $2 buyout proposal supports the stock for minority holders

• ▲EVgo shares pressure up — the $2 buyout proposal, well above the prior price, attracts buyers

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