Brookfield has taken a 2.56% stake in Australia’s largest energy company, AGL Energy (ASX: AGL), suggesting that the Toronto-based global assets manager has not given up interest in acquiring the business.
In February, Brookfield (NYSE: BAM) backed Atlassian founder Mike Cannon-Brookes in proposing a $7.50-a-share $5 billion acquisition of AGL which supplies electricity and gas from fossil fuel and renewable sources.
That bid, and a further $5.5 billion indicative offer, was rejected by the AGL board in favour of continuing with a plan to split the business into two listed companies, one focused on renewable energy and the other on coal and gas power generation.
Since then, Cannon-Brookes has a built up the largest stake in AGL, through his investment company Grok Ventures. After a campaign by Cannon-Brookes arguing that the demerger would only prolong involvement in fossil fuel energy generation, AGL abandoned its proposed split on 30 May and committed to undertaking a review of its strategic direction.
In a 23 June letter to shareholders, it said: “While your board believes the demerger proposal offered the best way forward for AGL Energy and its shareholders, we made this difficult decision as the anticipated voter turnout and stated opposition from a small number of investors made it clear that the demerger proposal would not receive the required 75% support from shares voted that it needed.”
On 30 June, AGL announced it had become aware that “Australian 123456789 4 Pty Ltd, a company which appears from ASIC searches to be a subsidiary of Brookfield Asset Management Inc. (Brookfield), has acquired 17,208,683 shares (or 2.56%) in AGL as at 24 June 2022”.
AGL noted that it had become aware of the share purchases through routine registry analysis responses and therefore the information was historical and subsequent trading might have altered the position.
The company said it had not received any updated acquisition proposal from Brookfield since the two proposals earlier in the year; it was continuing to focus on its strategic review.
AGL shares closed at $8.28 on 1 July.
Image: AGL coal-fired power generation in the Latrobe Valley, Victoria. Mike Cannon-Brookes has criticised the rate at which the company plans to phase out coal.