Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

AGL (ASX:AGL) share price under pressure as bidders walk away

The AGL Energy Ltd (ASX:AGL) share price is under scrutiny today after the energy company rejected a second bid.

The AGL Energy Ltd (ASX: AGL) share price is under scrutiny today after the energy company rejected a second bid.

AGL rejects second bid

The company announced this morning that it had rejected a second bid from the consortium which included Brookfield Asset Management and Grok Ventures (which is Mike Cannon-Brookes’ investment entity).

This second bid was $8.25 per share. The first offer was $7.50 per share. That means this offer was 10% higher than the first one.

Compared to the pre-bid price, the second bid represented a 15.2% premium to the AGL Energy closing share price of $7.16 on 18 February 2022.

Why did AGL reject this bigger bid?

AGL Energy’s chairman Peter Botten said that this latest offer still ignored the opportunity that AGL Energy shareholders have through the proposed demerger.

Mr Botten thinks that this demerger of the retailing business and energy generation business will create value for shareholders because each business will be able to be valued separately and more positively by the market, with separate dividend and capital structures for each company which will help future growth and allow both companies to “responsibly decarbonise without impacting energy reliability and affordability”.

AGL also rejected the bid because it supposedly ignores the momentum that the company has recently seen through its “solid” half-year result, strong progress on the demerger, strong interest in the Energy Transition Investment Partnership and the improvements it’s seeing in forward wholesale prices.

Will there be another bid?

It seems that there won’t be.

Mike Cannon-Brookes said on Twitter that the consortium is “putting down our pens down – with great sadness”.

He then said:

Our path was the world’s biggest decarbonisation project. From Aus.

The board are proceeding with their demerger path.  This path is a terrible outcome for shareholders, taxpayers, customers, Australia and the planet we all share 🌏

Shareholders now vote on that path

AGL share price thoughts

The AGL share price has surged 45% from the mid-November price. It will be interesting to see if the price drops back to where it was or not.

The leadership seem very confident about the demerger plans, but investors seem a bit less convinced about that path.

I’m not personally looking to buy AGL shares. Shareholders could well decide to vote no on the demerger, or they may kick up a fuss and want AGL to consider a takeover.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
Skip to content