AGL chief executive Graeme Hunt has rejected billionaire Mike Cannon-Brookes’ claim he can shut and replace the company’s coal-fired power stations without price shocks, warning shareholders will not cede control of the 180-year-old energy giant unless they are paid a far bigger premium.
In his first public comments since the offer was lobbed on Saturday, Mr Hunt acknowledged the need to transition AGL away from coal but said the bidding consortium’s timeline of shutting its plants was “overly accelerated” and its offer for the business was far too low. “It’s very clear to me that shareholders are extremely unimpressed with what’s been offered from a value perspective,” he told The Age and The Sydney Morning Herald.
Atlassian founder Mike Cannon-Brookes and AGL chief executive Graeme Hunt.Credit:Wolter Peeters/Louie Douvis
Mr Cannon-Brookes, Australia’s third-richest person, joined Canadian asset manager Brookfield to launch an $8 billion bid to buy AGL this week, with plans to close its remaining coal plants by 2030 and spend $20 billion more to replace them with large-scale renewable energy and batteries.
The proposal was criticised by Prime Minister Scott Morrison who claimed that power prices would go up if more coal plants were closed too quickly.
Loading
AGL’s board has rejected the takeover offer, which represented a 4.7 per cent premium on the company’s Friday closing price of $7.16 a share, saying it “materially undervalued” the business. “If you’re going to try to take control of a company … then you need to go into it the way it would normally happen in the corporate world, and you pay a ‘control premium’ which typically is 30, 40, 50 per cent, depending on the circumstances, over and above what the company trades at,” Mr Hunt said.
Mr Hunt said the consortium’s plan to close AGL’s remaining coal-fired power plants by five years to 2030 risked disrupting the market and would ultimately punish households and businesses with higher energy bills.
“We are not saying there shouldn’t be an energy transition,” he said. “We are just saying we know what is possible, and we are doing that, and we are going to review that year in year out and manage our changeover plans, accelerate them where appropriate.”
AGL’s existing commitment to bring forward the closure of its Bayswater plant in NSW by two years to 2033, and Victoria’s Loy Yang A plant by three years to 2045, was “responsible and considered”, Mr Hunt added, while the consortium’s plan to quit coal entirely by the end of the decade would “jeopardise energy security and energy affordability”.
