AGL Energy Limited (AGL) today announced that it has entered into agreements for the outright acquisition of 19.9% of the issued shares of Australian Power and Gas Company Limited (APG), and that it intends to make an off-market takeover offer to acquire all of the issued shares of APG (APG Shares) that it does not currently have an interest in at $0.52 cash per share (the Offer).
The 19.9% interest is to be acquired by AGL from each of APG's three largest shareholders – Nippon Gas (~5.2%), The Cobra Group (~5.2%) and the Poole Interests (~9.5%).
These shareholders have also announced their intention to accept the Offer, by no later than the business day after the Offer becomes unconditional and in the absence of a superior proposal, in respect of their remaining APG Shares, which equate to a further 36.9% of APG Shares. An independent Board committee established by APG to evaluate the transaction has recommended that APG shareholders accept the offer, in the absence of a superior proposal and subject to the independent expert appointed by APG concluding that the Offer is reasonable.
The proposed price represents a 33% premium to APG's closing price of 39.0 cents on 12 July 2013 and a 51% premium to APG's 3 month volume weighted average price of 34.4 cents. It implies a total enterprise value of $158 million.
The acquisition will be 100% financed from cash reserves and existing debt facilities. AGL anticipates the acquisition will be modestly accretive to underlying earnings per share from FY14.
AGL's Managing Director, Michael Fraser, said: "The acquisition of APG will further strengthen AGL's retail business. It will increase our total customers by approximately 10%, effectively achieving our goal of 800,000 electricity customers in New South Wales."
"We will create value by leveraging our lower cost-to-serve across the APG customer base. The transaction provides compelling value to APG shareholders and will enable APG customers to obtain enhanced products and services."
AGL is one of Australia's leading integrated renewable energy companies and is taking action toward creating a sustainable energy future for our investors, communities and customers. Drawing on 175 years of experience, AGL operates retail and merchant energy businesses, power generation assets and an upstream gas portfolio. AGL has one of Australia's largest retail energy and dual fuel customer bases. AGL has a diverse power generation portfolio including base, peaking and intermediate generation plants, spread across traditional thermal generation as well as renewable sources including hydro, wind, landfill gas and biomass. AGL is Australia's largest private owner and operator of renewable energy assets and is looking to further expand this position by exploring a suite of low emission and renewable energy generation development opportunities.