Australia’s biggest polluter and major coal generation company, AGL Energy (ASX:AGL) has turned down a second bid by tech-billionaire Mike Cannon-Brookes’ Grok Ventures and Canada’s Brookfield Asset Management, claiming the proposal is still “well below the fair value” of the company on a change of control basis and relative to the expected value of the demerger.

The move comes two weeks after the duo made an initial offer of $7.50 a share, which reflected a 4.6% premium to AGL energy shares at the time for a sum of $8 billion.

AGL shares dipped 2% on the news, closing at $7.30.

Board convinced offer ‘unrealistic’

After news broke on Sunday of a second bid, AGL confirmed Monday morning that the revised $8.25 per share offer – reflecting a 10pc increase to the initial bid “continues to ignore the opportunity that AGL Energy shareholders have through our proposed demerger to realise potential future value.”

The board’s chairman, Peter Botten said, “It also ignores the momentum we have recently seen in the business through our solid half year result, strong progress on the demerger, strong interest in our Energy Transition Investment Partnership and the improvements we are seeing in forward wholesale prices.”

Botten went on to say the proposed demerger “will be a catalyst for the potential realisation of shareholder value” and will create two “industry leading companies” with distinct value propositions.

But according to critics, its plan to split the coal business into a separate entity named Accel Energy, means the company will be burning coal for another two decades and ignores the target set by the Paris Agreement of keeping global temperatures below 1.5 degrees celsius.

Cannon-Brookes took to Twitter saying, “The Brookfield-Grok consortium looking to take private & transform AGL is putting our pens down – with great sadness.”

“This weekend, the board rejected our raised offer of $8.25. 46% more than the price of $5.55 about 90 days ago.

“Our path was the world’s biggest decarbonisation project from Australia.”

“The board are proceeding with their demerger path – this path is a terrible outcome for shareholders, taxpayers, customers, Australia and the planet we all share.”

Earlier this month, AGL brought forward the planned closure date of the Bayswater black coal plant in New South Wales to no later than 2033, and Loy Yang A in the Latrobe Valley to 2045.

Not too long after, Origin Energy (ASX:ORG) announced its newly proposed 2025 coal exit after claiming “rapidly changing conditions”  of Australia’s energy landscape are not well suited to “traditional base-load power stations” as the nation continues  its trajectory towards cleaner sources of energy.

“Economically these assets are redundant,” gas analyst for the Institute for Energy Economics & Financial Analysis Bruce Robertson says.

“They think they will deliver value, but I personally think its wealth destructive and its wealth destructive for a very simple reason – Accel Energy, or as its affectionately known in the stock market ‘ShitCo’ is of very questionable value.

“They have monstrously destroyed shareholder wealth.”

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