Canadian fund manager snaps up stake in AGL Energy

AGL Energy confirmed on Thursday it had become aware that a subsidiary of Canadian investment firm Brookfield Asset Management had bought 17.2 million shares in the Australian energy major, representing 2.56% of its register.

AGL said it became aware of the transaction, which occurred late last week, through routine registry analysis responses and acknowledged the information may be historical.

“It is possible that subsequent trading may have altered the position,” AGL said.

“AGL has not received any updated acquisition proposal from Brookfield, since the two proposals received earlier this year that were announced to the market.”

The acquisition comes after Brookfield, in partnership with Australian software billionaire Mike Cannon-Brookes’ investment vehicle Grok Ventures, earlier this year tabled two offers to acquire 100% of AGL Energy, Australia’s largest electricity generator and the nation’s largest carbon emitter.

The offers valued the company at more than $8 billion and came with a promise to invest up to $20 billion to build enough large-scale renewables and batteries to bring forward the closures of AGL’s fleet of coal-fired power stations in Victoria and New South Wales.

AGL rejected those buyout offers but Grok has since become the biggest shareholder in the public company, having acquired an 11.28% stake worth an estimated $650 million.

While Grok and Brookfield are no longer in talks about making an offer, the latest transaction adds to the uncertainty surrounding AGL, which last month abandoned its plan to split its business in two, conceding defeat in the face of “opposition from a small number of investors”.

Under the proposed demerger, AGL would have been split into separate entities – energy retailer AGL Australia and generator Accel Energy which would have retained control of the existing coal-fired assets, including the Loy Yang A power station in Victoria, and the Liddell and Bayswater power stations in New South Wales.

AGL said on Thursday it is continuing to focus on a strategic review into the future company, a review it embarked upon immediately after it abandoned the demerger plan.