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AGL - AGL Energy

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ASX & Media Release

Board rejects unsolicited non-binding indicative proposal

21 February 2022 AGL Energy Limited (AGL Energy) advises that it has rejected an unsolicited, preliminary, non-binding indication of interest from a consortium led by Brookfield Asset Management Inc and including Grok Ventures (collectively, the Brookfield Consortium) to acquire 100% of the shares in AGL Energy for $7.50 per share by way of a scheme of arrangement (Unsolicited Proposal).
The AGL Energy Board considers that the Unsolicited Proposal, which was received on the morning of Saturday, 19 February 2022, materially undervalues the company on a change of control basis and is not in the best interests of AGL Energy shareholders. AGL Energy shareholders do not need to take any action in response to the Unsolicited Proposal. The Unsolicited Proposal represents a:
 4.7% premium to the closing price of AGL Energy of $7.16 on 18 February 2022;
 4.2% premium to the volume weighted average price (VWAP) since AGL Energy’s 1H22 Results announced on 10 February 2022 of $7.201 ;
 4.3% premium to the one-month VWAP of $7.192 .
The Unsolicited Proposal is a cash proposal, with an option for AGL Energy shareholders to elect a scrip alternative in the Brookfield Consortium’s acquiring vehicle (subject to a maximum participation cap of 20% AGL Energy shareholder ownership in the acquiring vehicle). The Unsolicited Proposal provided limited other information regarding the structure of the acquiring vehicle and the scrip alternative.
The Unsolicited Proposal is also subject to a number of other conditions and assumptions, including due diligence, and approvals from the Australian Competition and Consumer Commission (ACCC) and Foreign Investment Review Board (FIRB).
On the basis of the information presented, the AGL Energy Board has determined that the Unsolicited Proposal materially undervalues the company on a change of control basis and is not in the best interests of AGL Energy shareholders.
The AGL Energy Board remains committed to progressing the proposed demerger of AGL Energy to establish two separately listed businesses, AGL Australia and Accel Energy, and considers the proposed demerger will deliver better value for AGL Energy shareholders. AGL Energy 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. “Under the Unsolicited 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.” 1 VWAP since AGL Energy’s 1H22 Results calculated for the inclusive period of 10 February 2022 – 18 February 2022 2 One-month VWAP calculated for the inclusive period of 19 January 2022 – 18 February 2022 2 AGL Energy Demerger

Since announcing the structural separation proposal on 31 March 2021, the Board has rigorously tested various alternative options available to it and the AGL Energy Board continues to believe the proposed demerger is in the best interests of AGL Energy shareholders. As announced on 10 February 2022, the proposed demerger is progressing well and is on track for completion by 30 June 2022. The Board is confident that the demerger will create a strong future for both parts of the business, resulting in two industry leading companies both with the ability to unlock value as each business pursues their individual tailored purposes and strategies. “AGL Energy has the proven ability to continue to reinvent our business to meet the changing needs of our customers. Our locally developed, industry leading capability means that we are best placed to continue to serve the households and businesses of Australia, while delivering a responsible pathway to a decarbonised future,” Mr Botten said. “On a daily basis we deliver services to around 4.5 million customers3 . Under our demerger those customers who depend on us now can be sure that AGL Australia will leverage its deep energy expertise, systems and scale to further enhance these services in a low carbon world, while at the same time Accel Energy advances a new energy future together with its workforce, community and government. “At the recent results announcement AGL Energy also outlined climate commitments for both proposed organisations that demonstrated decisive action on decarbonisation.
These commitments strike a balance between enabling Australia’s current and future energy needs and the need to responsibly decarbonise, without impacting energy reliability and affordability. “The commitments set a new baseline for both organisations against which they will measure their success and strive to improve as the energy market evolves. Under these commitments, AGL Australia would achieve 50% reduction in emissions by 20304 and Accel Energy would achieve a 55-60% reduction5 in emissions by no later than 2034, with the potential to bring this forward should the system be ready.” Both AGL Australia and Accel Energy have completed financing arrangements announced at the recent FY22 results announcement. “AGL Australia and Accel Energy will continue to have access to the deep public and private capital markets to support their renewable energy development plans.
This will continue the AGL Energy legacy of investment in renewables that has seen us invest $4.8bn over the last two decades in transition including our part ownership of the $3 billion renewable developer TILT Renewables. “We have also received strong interest for the proposed Energy Transition Investment Partnership (ETIP) fund in recent months.
The ETIP is being established to support Accel Energy’s commitment to transition our existing thermal generation sites to low-carbon Industrial Energy Hubs.” AGL Energy is currently in-market to establish the ETIP as an investment vehicle to back the development of Accel Energy’s key renewable and low carbon firming assets.
Accel Energy will act as vehicle manager in addition to managing development, output marketing, construction, assets and dispatch. AGL Energy is working towards establishing the ETIP by the point of demerger. 3 Includes approximately 300,000 services to customers of ActewAGL, in which AGL Australia will own a 50 percent shareholding in the retail operations 4 On FY19 levels for Scope 1, 2 and 3 emissions for AGL Australia 5 FY19 baseline comprises Scope 1 and Scope 2 emissions for all electricity generation assets that will be owned and operated by Accel Energy following demerger, as reported under the National Greenhouse and Energy Act 2007 3 Under the proposed demerger both AGL Australia and Accel Energy will be focused on supporting the development of renewable and flexible generation capacity with AGL Australia’s commitment to underwrite 3 GW of new capacity by 2030 and Accel Energy starting with 2.7 GW of projects in the pipeline at various stages of feasibility, planning or development and the potential for more.
In the absence of a proposal that provides appropriate value to AGL Energy shareholders on a control basis, the Board continues to believe the demerger maximises value for shareholders and is in the best interests of shareholders.

Macquarie Capital, Goldman Sachs and Herbert Smith Freehills are advising AGL Energy. Authorised for release by AGL Energy’s Board of Directors.

DYOR

i do not hold this share
 
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"Brookfield -Atlassian" will make NSW electricity cheaper, apparently, as reported in the press today.

Beware of Greeks bearing gifts -is what I say to AGL shareholders..

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Dona Ferentes

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AGL has rejected a second takeover offer from tech billionaire Mike Cannon-Brookes and his Canadian partners, Brookfield.

Mr Cannon-Brookes, through his investment firm Grok Ventures and Canadian investment firm Brookfield, made an increased offer of $8.25 a share, a 75 cent per share increase from the original $7.50 bid made a fortnight ago. The revised offer is around a 10 per cent increase on the original $8 billion bid and was made on Friday afternoon.

AGL's board met over the weekend and decided to reject the offer. The company is expected to make an official update to the ASX on Monday.

Brookfield and Grok Ventures are expected to walk away from the takeover push after the consortium's second failed attempt to take over the company. The Canadian firm was funding about 80 per cent of the bid.


..................... and here's the zinger! Gosh
The Consortium is withdrawing from the process to take AGL private and believes that the company’s demerger proposal is not in the interest of shareholders, consumers or the planet," a source close to both parties said.
and in a tweet on Sunday night. Mr Cannon-Brookes described the demerger path as a "terrible outcome for shareholders, taxpayers, customers, Australia and the planet we all share".

So, I can come and live at your place?

(what a phoney ... 20% and probably borrowed, anyway. PR stunt)
 
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and in a tweet on Sunday night. Mr Cannon-Brookes described the demerger path as a "terrible outcome for shareholders, taxpayers, customers, Australia and the planet we all share".
A terrible outcome for his own personal wealth more likely.

Bottom line is the world has a major energy crisis unfolding. LNG and black coal prices have gone through the roof and oil price is rising rapidly now too.

In that context AGL's Loy Yang operation, mining its own coal at minimal cost, has massive value in the medium term and the hydro operations are likewise valuable albeit on a smaller scale.

Australia NEM (all states except NT and WA) average wholesale electricity pricing on a calendar year basis:

2015 = $43.58
2016 = $63.05
2017 = $103.13
2018 = $85.86
2019 = $93.23
2020 = $57.62
2021 = $79.98
2022 to date = $145.88

This industry isn't going away anytime soon and if AGL can't turn that into profit then something's very wrong. :2twocents
 
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A terrible outcome for his own personal wealth more likely.

Bottom line is the world has a major energy crisis unfolding. LNG and black coal prices have gone through the roof and oil price is rising rapidly now too.

In that context AGL's Loy Yang operation, mining its own coal at minimal cost, has massive value in the medium term and the hydro operations are likewise valuable albeit on a smaller scale.
Nailed it.
In a way, the take over offer IMO, is somewhat like the situation in Germany.
You get people with very strong ideological beliefs, in charge of critical infrastructure, the first thing to go out the window is critical thinking IMO.
 
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orr

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You get people with very strong ideological beliefs, in charge of critical infrastructure, the first thing to go out the window is critical thinking IMO.
That's a reference to Frydenberg's actions on Andrew Vesey ...right?
 
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Divvies! :) Nice to see when you haven't been paying any attention to it.
Current SP plus the divvy still plenty less than last take over offer... if I was a holder, I'd be a little peeved, especially when looking at the last 7 years or so of the chart...
At least the mutt looks like it's found a bottom.
In this environment it should be sreaming back to and beyond $10, won't hold my breath on that front though.

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How they spend their profit is the key IMO.
All true.
However, as a trader / investor, they make it easy for us to not have the decision about where to spend our profits. Just have a look at the chart !
But again, I will say it does look like a bottom is in, and quite solidly too.
Can I ask @sptrawler , are you a holder of these gaslighters 🤣 ?

I guess if MCB and co had 2 takeover bites, they might come back for a third go... 3 times lucky?
 
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All true.
However, as a trader / investor, they make it easy for us to not have the decision about where to spend our profits. Just have a look at the chart !
But again, I will say it does look like a bottom is in, and quite solidly too.
Can I ask @sptrawler , are you a holder of these gaslighters 🤣 ?
Yes, just checked, I bought in on the 21/12/2021 @$6.04. it is the first time I've owned a elect utility company, was never a big fan of the sector even though I worked in it, but with this current change over to renewables I think there is an opportunity for a clever operator.
Whether that proves to be AGL or not is another thing, but IMO they are cheap, they earn a lot of steady income and they own a lot of HV transmission infrastructure.
I'm not a trader, but I will sell a share like this, if I see a better opportunity to deploy the cash.
 
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Jeez I don't know about that, ask @Miner , when I buy in, it's normally a signal far everyone else to bail out. 🤣
Mate
You put me on the spot. I know to nut. Did nutting. Just a speculative digger.
All I can say AGL has a bright future in renewable energy. It is the early hanging fruit compared to those who are playing on hydrogen.
In the next 4 years, people already established renewable energy would be laughing and experts will start drawing charts and I told you so.
I have unloaded half of my AGL holding as it was too hot to hold. For a change, the price shot up and I booked some profit.
DYOR, however, I have been often wrong than right.
 
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