In an announcement to the Australian Stock Exchange on Wednesday, the companies confirmed that Alinta would gain control of AGLÆs transmission and asset management businesses for a total of A$6.5 billion. The expanded Alinta would be 55% owned by Alinta shareholders and 45% by former AGL shareholders.
Meantime, AGLÆs Energy business will be spun off into a separately listed company and owned 100% by AGL shareholders.
AGL Energy will also buy a 33% stake in AlintaÆs West Australian retail and cogeneration business for A$367 million, with the right to acquire a full 100% over the next five years. The entity holding the West Australian retail and cogeneration business will be called AlintaAGL.
The compromise appears to appeal to AGLÆs board which has spent the last two months fending off a hostile takeover bid from Alinta, a company one-quarter AGLÆs size. The board was unreceptive to AlintaÆs advances because it wanted to pursue its own demerger plans first mooted in October 2005.
In a statement to shareholders on Wednesday, AGL chairman Mark Johnson said the current deal was consistent with the original demerger plan because it resulted in two distinct businesses in the energy and infrastructure sectors. There will be no cross shareholdings between the two.
ôThe transaction is forecast to be materially earnings per share and dividends per share accretive for the AGL Energy business in 2007 compared to the original proposed AGL demerger,ö says Johnson.
AGL is also pleased to be hanging on to 100% of the 'PNG to Australia' gas pipeline project which the company claims will deliver growth opportunities and cost savings to the business.
The new Alinta will be the largest energy infrastructure and asset management company in the country. Under the deal, it gains control of AGLÆs NSW Gas Networks, Victorian Electricity Networks, 50% of Actew AGL distribution assets, 30% of Australian Pipeline Trust, the Cawse power station, Gas Valpo and the Wattle Point Wind Farm.
Bob Browning will remain CEO of Alinta and Paul Anthony hangs on to his role as CEO of AGL Energy.
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