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AGL turns down Brookfield bid

AGL withdraw demerger

AGL Energy has advised that it has “rejected” an unsolicited, preliminary non-binding indication of interest from a consortium led by Brookfield. 

The takeover proposal was to acquire all shares in AGL for $7.50 per share by way of a scheme of arrangement. 

The consortium, which includes billionaire Mike Cannon-Brookes’ Atlassian, aspired to buy the energy company to fast-track the closure of its coal-fired power stations. 

The proposal was received on Saturday morning, 19 February, and followed by a meeting of the AGL board on Sunday afternoon, which agreed to knock back the bid on the basis that it “materially undervalued” the company’s worth. 

Brookfield also recently bought major transmission company AusNet after a drawn-out bidding war with APA. 

AGL said there were also questions regarding the structure of the acquiring vehicle and the scrip alternative.

It also noted the bid would need approval from the Australian Competition and Consumer Commission as well as the Foreign Investment Review board.

“The proposal does not offer an adequate premium for a change of control and is not in the best interests of AGL Energy shareholders,” chairman Peter Botten said. 

“Under the Unsolicited Proposal, the Board believes AGL Energy shareholders would be forging the opportunity to realise potential future value via AGL Energy’s proposed demerger as both proposed organisations pursue decisive action on decarbonisation.” 

While the initial bid has been rejected, this is not expected to mark the end of discussions with the Cannon-Brookes/ Brookfield consortium. 

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