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).
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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.”
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By GlobalDataBrookfield 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.
