AGL rejects green takeover bid
The board of energy company AGL Energy has rejected a takeover bid aimed at accelerating both the shutdown of the company’s coal-fired power plants and its investments in renewable energy.
The company issued a statement to the ASX this morning saying it was rejecting an “unsolicited and non-binding indication of interest” from a consortium including tech billionaire Mike Cannon-Brookes.
Canadian companies Brookfield Asset Management and Grok Ventures – the Cannon-Brookes VC company – offered $7.50 per share, valuing AGL at $8 billion and promising to invest $10 billion in power generation renewable.
The offer revealed only on Saturday was a 4.7% premium to Friday’s closing price and a 20% premium to the average price traded over the past month.
Bidders plan to accelerate closure of AGL’s Bayswater power station in NSW and Loy Yang A in Victoria’s Latrobe Valley
AGL operates Australia’s largest power generation portfolio, with an operated generation capacity of 10,984 MW, representing 20% of the total generation capacity of the national electricity market.
Last week, Origin Energy announced it would close the country’s largest coal-fired power station in Eraring, NSW in 2025, seven years ahead of schedule.
However, this morning AGL said the offer significantly undervalued the company and “is not in the best interests of AGL shareholders”.
“AGL Energy’s Board of Directors remains committed to advancing the proposed spin-off of AGL Energy to establish two separately listed businesses, AGL Energy and Accel Energy, and believes that the proposed spin-off will deliver better value to AGL shareholders. .”
Under AGL’s own proposal, Bayswater and Loy Yang A would be spun off into the new entity Accel Energy, with AGL Energy retaining its other assets.
AGL Energy chairman Peter Botten said the two proposed companies would take “decisive steps towards decarbonisation”.
Bayswater is scheduled to close in the early 2030s, followed by Loy Yang A 10 years later.
Any decision to close coal plants early has implications for federal policy as well as the national energy market.
Cannon-Brookes has previously entered the energy market as a backer of the $20 billion Sun Cable project to bring renewable energy to Singapore via an undersea cable.
Photo: AGL
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