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Brookfield flips AGL out of furnace into coal fire

Brookfield flips AGL out of furnace into coal fire

MELBOURNE, March 7 (Reuters Breakingviews) – The Canadian fund manager and its tech billionaire partner are abandoning a green takeover plan after their sweetened $6 bln bid was rejected. It leaves the Aussie power producer grappling with a weak demerger proposal and a pushy investor. Boss Graeme Hunt will feel the heat.Full view will be published shortly.Follow @AntonyMCurrie on TwitterRegister now for FREE unlimited access to Reuters.comRegisterCONTEXT NEWS- Brookfield Asset Management and Atlassian co-Chief Executive Mike Cannon-Brookes are walking away from an A$8.3 billion ($6.1 billion) takeover proposal for Australian power company AGL Energy, according to a March 6 tweet by Cannon-Brookes.- The consortium “looking to take private & transform AGL is putting our pens down – with great sadness,” he tweeted.- The decision follows AGL’s board rejection of a sweetened offer at A$8.25 a share, a 10% increase from the original offer.- The revised entreaty valued AGL’s equity at just under A$5.5 billion, a 15% premium to the price on Feb. 18, the day before the Brookfield group made its first offer, and a 31% premium to the three-month volume-weighted average price. Including debt, the offer valued the AGL enterprise at nearly A$8.3 billion.Register now for FREE unlimited access to Reuters.comRegisterEditing by Jeffrey Goldfarb and Thomas ShumOur Standards: The Thomson Reuters Trust Principles.Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. .

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Australia’s AGL Energy rejects $3.5 bln offer, backs decision to split

Australia’s AGL Energy rejects $3.5 bln offer, backs decision to split

  • Australia’s 2nd richest man, Canada’s Brookfield made joint bid
  • Offer was at a 4.7% premium to AGL’s last close
  • AGL says demerger plans on track

Feb 21 (Reuters) – Australian power producer AGL Energy Ltd on Monday rejected a $3.54 billion takeover offer from billionaire Mike Cannon-Brookes and Canada’s Brookfield Asset Management (BAMa.TO) in favour of its plan of splitting in two this year.AGL said the A$7.50 apiece proposal from Cannon-Brookes, Australia’s second-richest man and co-founder of software firm Atlassian, and the Canadian buyout group was a 4.7% premium to the stock’s Friday close and undervalued it.”The proposal does not offer an adequate premium for a change of control and is not in the best interests of AGL Energy shareholders,” AGL Chairman Peter Botten said.Register now for FREE unlimited access to Reuters.comRegisterThe unsolicited cash proposal with an option for AGL shareholders to elect a scrip alternative also provided limited other information about how the deal would be structured, Botten said.Cannon-Brookes’ investment vehicle, Grok Ventures, and Brookfield did not immediately respond to a request for comment.The profits and value of AGL, Australia’s biggest polluter, have shrunk on government pressure to cut retail rates, waning investor appetite for coal-fired power and an influx of solar and wind energy into the grid.The Australian Financial Review had reported on Sunday that the parties made a joint bid for AGL which included plans to halt its proposed split into a bulk power generator and a carbon-neutral energy retailer. AGL plans to re-brand as Accel Energy and hold the company’s coal-fired power plants and wind farm contracts. It would spin off AGL Australia Ltd, the country’s biggest retailer of electricity and gas, into a separately listed company. read more AGL said earlier this month it had made significant progress in its demerger plans and repeated on Monday that the split was on track to be completed by June. “The board is confident that the demerger will create a strong future for both parts of the business,” Botten said.($1 = 1.3961 Australian dollars)Register now for FREE unlimited access to Reuters.comRegisterReporting by Harish Sridharan and Shashwat Awasthi in Bengaluru; editing by Grant McCoolOur Standards: The Thomson Reuters Trust Principles. .