Australian utility AGL has rejected an unsolicited bid from a consortium led by Brookfield Asset Management to buy the firm, saying the offer “materially undervalues the company”.
The Brookfield consortium, which includes tech billionaire and climate activist Mike Cannon-Brookes, offered to buy 100 per cent of the company for A$7.50 (US$5.40) per share, valuing the entire company at about A$4.9bn.
That was a 4.7 per cent premium on Friday’s closing share price of A$7.16, and market capitalisation of A$4.7bn.
The acquisition would be likely to hasten the closure of two of the country’s largest coal-fired power stations, speeding up Australia’s already rapid transition to a renewables-dominated grid.
Only last week, AGL’s main competitor Origin announced it would close its last remaining coal plant in 2025, seven years earlier than planned.
AGL is planning to split the company in two, spinning off its coal generation assets into a new company to be called Accel Energy. The remaining company would focus on energy retail and renewable generation. The Brookfield bid would scrap that plan.
In a statement to the Australian Securities Exchange on Monday morning, AGL chairman Peter Botten said: “The proposal does not offer an adequate premium for a change of control and is not in the best interests of AGL Energy shareholders.”
He added that under the 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”.
AGL said the primary offer was all cash, but gave a secondary option for AGL shareholders to take payment in shares in up to 20 per cent of the company.