Australian tech billionaire Mike Cannon-Brookes has announced he and his partners will walk away from their plan to acquire AGL, Australia’s largest energy company, and accelerate the closure of its coal plants.
It comes after the AGL board rejected a second bid from the group. Cannon-Brookes said it was a “terrible outcome” and the group had abandoned the bid “with great sadness”.
What was the plan?
Cannon-Brookes was part of a group of investors, led by Canadian investment company Brookfield, wanting to buy AGL and turn it into a renewable energy company. The group planned to shut down AGL’s coal plants by 2030 – 15 years ahead of the current schedule – and make it a net-zero company by 2035.
Their initial bid, to buy all of the company’s shares at $7.50 a share, was rejected by the board last month. The board confirmed today it had rejected a second bid, this time for $8.25 a share.
In a statement, AGL said it believed the proposal was “well below the fair value of the company” and “not in the best interests of AGL Energy shareholders”.
AGL was valued at $7.35 a share at the start of trading today – well below the offer of $8.25 a share. However, the board believes its plan to transition out of coal by splitting the company in two will create more value in the future than the Cannon-Brookes/Brookfield proposal.
In a tweet, Cannon-Brookes described AGL’s plan to split its company in two as “a terrible outcome for shareholders, taxpayers, customers, Australia and the planet we all share”.