Alinta Makes Merger Proposal to AGL Following Acquisition of 10% Stake

Strategic Insights -

Alinta Ltd, a leading West Australian gas supplier, has made a merger proposal to the Australian Gas Light Company Ltd (AGL) after acquiring a 10% stake in the energy business. The merger proposal, which would see Alinta acquire the remaining 90% of AGL, is seen as a significant development in the Australian energy market. Alinta's chief executive, Bob Browning, has stated that the merged company would be a truly national energy company that could deliver outstanding value to shareholders and customers.

Key Takeaways:

  • Alinta has acquired a 10% stake in AGL at $A19.45 ($US14.40) a share from institutional and professional investors.
  • Alinta will seek to discuss a merger with AGL, offering 1.773 Alinta shares for each AGL share, and would acquire the remaining 90% of AGL if a scheme of arrangement is approved.
  • The merger proposal is believed to create more value for AGL shareholders than AGL's current demerger plans.
  • The merged company would be a truly national energy company that could deliver outstanding value to shareholders and customers.
  • Current AGL shareholders would end up with a share in a merged AGL/Alinta energy company and share in a merged AGL/Alinta infrastructure company for every AGL share they currently held.
  • AGL shares had raced up 95 cents to $A19.25 ($US14.25) at 1148 AEDT, while Alinta shares remained on a trading halt at the request of the company.
  • Alinta chief executive Bob Browning believes the merger proposal presents a compelling case to the AGL directors and expects them to engage in discussion in the best interests of their shareholders.
  • The proposed merger would enable Alinta to offer greater value to shareholders and customers through significant cost savings, merger synergies, and a more effective structure.

Statistics:

  • Alinta acquired a 10% stake in AGL at $A19.45 ($US14.40) a share.
  • The proposed merger would see Alinta offer 1.773 Alinta shares for each AGL share.
  • AGL shares had raced up 95 cents to $A19.25 ($US14.25) at 1148 AEDT.
  • Alinta shares remain on a trading halt at the request of the company.

Sources:

  • MELBOURNE, Feb 21 Asia Pulse - West Australian gas supplier Alinta Ltd (ASX:ALN)
  • Australian Securities Exchange (ASX) - Alinta Ltd (ALN) and Australian Gas Light Company Ltd (AGL)