Australian services company AGL has rejected an unsolicited offer from a consortium led by Brookfield Asset Management to buy the company, saying the offer “virtually reduces the value of the company”.
The Brookfield consortium, which includes tech billionaire and climate activist Mike Cannon-Brooks, has offered to buy 100 percent of the company for A$7.50 ($5.40) per share, valuing the entire company at around A$4.9 billion.
That was a 4.7 per cent premium to Friday’s closing price of A$7.16, and a market capitalization of A$4.7 billion.
The acquisition is likely to speed the shutdown of two of the country’s largest coal-fired power plants, accelerating Australia’s already rapid transition to a grid dominated by renewables.
Just last week, AGL’s main competitor, Origin, announced that it would close its last remaining coal plant in 2025, seven years earlier than planned.
AGL plans to split the company in two, splitting its coal-generation assets into a new company called Accel Energy. The remaining company will focus on energy retail and renewable energy generation. Brookfield’s attempt would cancel that plan.
In a statement to the Australian Securities Exchange on Monday morning, AGL Chairman Peter Putin said: “The proposal does not provide a sufficient premium to change control and is not in the interest of AGL Energy shareholders.”
He added that under the proposal, “the Board believes that shareholders of AGL Energy will forgo the opportunity to realize potential future value through the proposed separation from AGL Energy as both proposed organizations seek decisive action on decarbonization.”
AGL said the primary offer was all in cash, but gave a secondary option for AGL shareholders to receive payments in shares of up to 20 percent of the company.
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