Doubts raised by UBS about the costs of AGL’s proposed split and whether the retail business would be re-rated by the market have supported Mike Cannon-Brookes’ criticism.
The $260 million-plus of costs involved with AGL Energy’s proposed demerger may not be offset by savings that would result from the restructuring, according to UBS energy analysts in a finding that lends weight toThe analysis by UBS analysts Tom Allen and Joseph Wong also cast doubt on whether the split of the giant electricity supplier into coal power-focused Accel and retailer AGL Australia will really result in a “re-rating” of the retailer among financiers, reducing its cost of capital.
“There is not a single shareholder that I’ve spoken to that has voiced a view contrary to the fact that AGLA [AGL Australia] should trade at a higher multiple post demerger,” Mr Hunt said. The tech magnate insists that AGL must remain as an integrated energy supplier in order to be able to accelerate its exit from coal power generation, and bring forward closure dates for the Loy Yang A generator in Victoria, and the Bayswater power station in NSW.says the split would “deliver a terrible outcome for shareholders, customers, Australian taxpayers and the planet” and describes the demerger as “globally irresponsible”.
UBS analysts said that leaves shareholders largely relying on the premise set out in the scheme booklet: that the sum of AGL Australia’s and Accel’s cost of capital would be stronger than AGL Energy today; that the extra costs involved or “dis-synergies” are more than offset by sustainable cost savings; and that future value from growth opportunities open to AGL Australia and Accel that are not open to the integrated company can be unlocked.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
AGL CEO queries ‘end game’ of Cannon-BrookesCEO Graeme Hunt says AGL is “asking questions” to ensure shareholder interests are protected as he queries the tech mogul’s motives for seeking to block the demerger.
Read more »
Ownership Matters sounds alarm on Cannon-Brookes AGL moveAs AGL management and shareholder groups raise alarm about the way in which Mike Cannon-Brookes has assembled his 11.3 per cent stake, the billionaire insists there’s ‘no financial wizardry’.
Read more »
Expert warns Cannon-Brookes’ share tactics could derail his AGL playAn influential shareholder advisory group has raised concerns about billionaire Mike Cannon-Brookes’ use of complex derivatives to acquire an economic interest in AGL | sdanck
Read more »
VW boss admits speed of Tesla’s expansion surprised himIn terms of electric car sales, Herbert Diess says Volkswagen may not catch up with Elon Musk’s firm for a while
Read more »
Why falling property prices are actually bad news for first home buyersFalling house prices may not be the blessing for first-time buyers it seems, with higher interest rates reducing their borrowing capacity more than any likely decline.
Read more »
Why falling property prices are actually bad news for first home buyersProspective first home buyers’ relief in seeing property prices fall could be short-lived as higher interest rates reduce the amount they can borrow and the gap between what they can afford and house prices widens. | Analysis by John Collett ...
Read more »