Brookfield spurned in US$14B plan to close coal plants
BNN Bloomberg
AGL Energy Ltd. rejected a multibillion-dollar takeover bid from Brookfield Asset Management Inc. and technology billionaire Mike Cannon-Brookes.
Australian utility AGL Energy Ltd. rejected a multibillion-dollar takeover bid from Brookfield Asset Management Inc. and technology billionaire Mike Cannon-Brookes, who plan to accelerate the closure of the company’s polluting coal-fired power plants.
Brookfield and Cannon-Brookes’s investment firm Grok Ventures have a A$20 billion (US$14 billion) transition plan to shift AGL to clean energy and “remains optimistic that an agreement can be reached,” the consortium said in a statement. AGL shares jumped 11 per cent to close at the highest since July.
“The board should continue to engage with Brookfield and Cannon-Brookes, however they will need to considerably increase the offer if they want to get the investment community onboard, even though we agree with the ideals they propose,” said Jamie Hannah, deputy head of investments and capital markets at Van Eck Associates Corp, which owns shares in AGL.
A proposal of A$7.50 a share, a 4.7 per cent premium to Friday’s closing price, “materially undervalues” the company, Sydney-based AGL said in a statement. The company’s own plan to split off its coal assets into a separate unit would deliver better shareholder value, and offers a more responsible path to decarbonization, the utility said.
Public debate on climate change in Australia and the role of coal, which still provides most of the country’s electricity, intensified after wildfires in late 2019 and early 2020. Though Prime Minister Scott Morrison set a net-zero emissions target last year, his government has been criticized for favoring a slower energy transition. He has been pushed by some investors to exploit the nation’s abundant sun and wind to more rapidly build out a green power industry.
