AGL Acquires Australian Power

Australian Power and Gas, which has been having troubles in its operation, is being taken over by the largest energy company in Australia.

AGL Energy has taken over Australian Power in a bid that cost 52 cents a share and 33% premium to the share price.

Australian Power had been trading at the rate of 39 cents before the takeover, and its value was at $75 Million. AGL now owns 19.9% of Australian Power’s stake, giving it a strong hold of the struggling company’s market shares.

Australian Power and Gas serves about 350,000 clients and has been known over the years as one of the largest second-rate electricity and gas retailers. The company’s business woes have been attributed to high-energy rates and low demands, but analysts also point out that its debt levels have been rising.

Australian Power and Gas has had a huge net loss, in the amount of $5 Million, in the last financial year. Shareholders were even told that the company will be going through a “period of consolidation” in order to bounce back and manage its difficulties in trading.

AGL Energy, meanwhile, won the bidding against two other companies — Energy Australia and Origin Energy, with its additional shares. Coincidentally, its rivals’ purchase of shares in the NSW market has pushed AGL Energy to buy into Australian Power and Gas. This also fittingly comes at a time when AGL Energy was reportedly said to have been interested in bidding to gain control of Delta Electricity’s coal power stations.