Australian energy company AGL Energy has rejected an unsolicited non-binding indicative takeover bid from a consortium led by Brookfield Asset Management, which includes Grok Ventures.

The Brookfield Consortium proposed to acquire a 100% stake in the company by paying A$7.50 ($5.40) for each of the company’s shares via a scheme of arrangement (Unsolicited Proposal).

Reuters reported that the bid valued the company at around $3.54bn.

AGL Energy said that its board decided to turn down the offer as it would ‘materially undervalue’ the company on a change of control basis and was deemed not to be in the best interests of the company’s stakeholders.

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 our shareholders.

“Under the unsolicited proposal, the Board believes our shareholders would be forgoing the opportunity to realise potential future value via the company’s proposed demerger as both proposed organisations pursue decisive action on decarbonisation.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Brookfield Consortium’s cash proposal also includes an option for AGL Energy shareholders, which would allow them to choose a scrip alternative in the consortium’s acquiring vehicle.

This proposal would be subject to a maximum participation cap of 20% shareholder ownership.

AGL Energy’s board has reiterated its commitment to the company’s proposed demerger, which it believes will deliver better value for the company’s shareholders.

The demerger will establish two separately listed businesses, namely AGL Australia and Accel Energy.

Both of these businesses have completed financing arrangements and the ongoing demerger process is expected to be completed by 30 June.

Based in Sydney, AGL Energy operates Australia’s largest private electricity generation portfolio.

Last March, the company agreed to acquire two solar businesses, namely Epho and Solgen Energy Group.