AGL rejects takeover bid by Mike Cannon-Brookes and Canadian fund manager Brookfield
AGL Energy has rejected a takeover bid by tech billionaire Mike Cannon-Brookes and Canadian asset management giant Brookfield, saying the preliminary offer “materially undervalues the company”.
Brookfield and Cannon-Brookes’ Grok Ventures made the extraordinary offer to take over Australia’s most polluting company on Saturday, with a goal to shut its coal power plants earlier than planned.
In a statement to the Australian Stock Exchange, AGL said it had rejected the unsolicited preliminary offer of $7.50 a share, which offered a 4.7% premium on Friday’s closing price of $7.16. Including AGL’s debt, the offer was in the range of $8bn. The company said it was not in the best interest of shareholders.
Speaking on Monday, Cannon-Brookes said the consortium would continue to work on the potential takeover, which would involve Brookfield and Grok Ventures acquiring AGL’s power generation and energy retail divisions, which include coal, gas and renewable energy generation assets.
If successful, the new owners would aim to bring forward AGL’s exit from coal-fired power. It would also halt a planned demerger that would have broken off the company’s fossil fuel assets into a separate entity, to be called Accel Energy.
AGL chairman Peter Botten said the bid did not offer an adequate premium for a change of control of the company. “Under the unsolicited proposal, the board believes AGL Energy shareholders would be forgoing the opportunity to realise potential future value via AGL Energy’s proposed demerger, as both proposed organisations pursue decisive action on decarbonisation.”
Cannon-Brookes said the consortium was confident it could close and replace AGL’s coal plants – Bayswater in New South Wales and Loy Yang A in Victoria – by
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