AGL - AGL Energy

DrBourse said:

Be careful, AGL's IV is between $5.62 & $6.05 atm, so it is currently just a bit overpriced.

Click to expand...

I guess it depends if you are a trader, or a buy and hold, but it would be good if they slip back into the $5 range.

Nice gap up, full white candle that has taken price above the final high of the prior downtrend.
I.e behaving well for holders or potential boarders.
(Not held, not buying)

Daily

OK, I think I get the demerger now.

Sean K said:

@Smurf1976 and @Wedgy I think this could be a cunning pick for 2022.

Click to expand...

But, I'm not sure how the demerger is going to effect your pick of AGL for the full year. You will own two companies by the EOY??

Credit Suisse upgrade.
James Gerrish yesterday:

• AGL Energy (AGL) +8.6% rallied after Credit Suisse upgraded to a buy equivalent and $8.50 PT – we own AGL in the Income Portfolio with the position now up nearly 30%.

StockyGuy said:

Bought a chunk of AGL yesterday at 5.82 - never auspicious sign when it drops down straight after - closing today at 5.68. It's a long termer for me (in whatever form, given impending split into 2 companies). IMO uncertainty on the split up is punishing the share price irrationally.

This one has broken many hearts, though There's a lot of negative sentiment around from those who got in at much higher prices, and may've sold already at a big loss. It's not what you expect from an ancient Aussie household name utility company.

(There is no recommendation here; it's a long term gamble. I'm prepared for the falling knife to bloody my hands.)

Click to expand...

Closing price today at 6.96. Seems there was decent value hunting volume under 6 bucks. (Still holding, no extra bought.)

According to Todays Australian Mike Cannon-Brooks has teamed up with Canadian Asset Manager Brookfield to put in a takeover offer for AGL.

AGL Energy has received a takeover bid from billionaire Mike Cannon-Brookes and Canadian asset management giant Brookfield.
The offer was lobbed at AGL and sent to the company’s board on Saturday.

The duo have pitched a deal saying they can accelerate the decarbonisation efforts of the power giant.
It comes ahead of a historic demerger of the 180-year-old electricity company set to go to a shareholder vote later this year.

AGL’s board will meet on Sunday afternoon and issue a statement on Monday morning.

Click to expand...

This may well be good for existing shareholders of AGL (particularly those who most recently bought in at mid 550's).
Unfortunately, it may not be good for the reliability of of electricity supply as he wants to accelerate the decarbonisation of the energy giant.
Time will tell.
Mick

I might have missed the news. However, acquired AGL 15 Dec 2021 at $5.85.
My prime driver at that time was renewable energy and AGL was deemed to be a great player.
I suspect unless it was advised on ASX, any such takeover offer would be treated as a rumour.
But if the market got the sniff then has reacted not positively and Monday news would give a clear direction.
Personally, with the 2050 target and most of the companies working on the target 2030 to have at least 50% renewable, I believe such acquisition would be a great opportunity just not for AGL holders but for others to get renewable energy credit from AGL.
Edited text below and re-entered

I was intrigued to find out the news and found a more detailed on AFR, published only a couple of hours back.



.

mullokintyre said:

According to Todays Australian Mike Cannon-Brooks has teamed up with Canadian Asset Manager Brookfield to put in a takeover offer for AGL.

This may well be good for existing shareholders of AGL (particularly those who most recently bought in at mid 550's).
Unfortunately, it may not be good for the reliability of of electricity supply as he wants to accelerate the decarbonisation of the energy giant.
Time will tell.
Mick

Click to expand...

This spells trouble. If we accelerate any further without low/no emission dispatchable 24/7 realised, the air-cons and lights will go out in summer and there'll be riots in the streets. Fed Gov will need to step in here.

Sean K said:

This spells trouble. If we accelerate any further without low/no emission dispatchable 24/7 realised, the air-cons and lights will go out in summer and there'll be riots in the streets. Fed Gov will need to step in here.

Click to expand...

Calm down mate.




I think you'll be alright.

Always funny watching ostensible capitalists squeal for Government intervention when the capital markets go against the ideology.

I think it's especially funny, after everyone complaining "why sell energy shares if you want to go green you should be supporting the businesses not cutting them off from capital" ...well here we are.

it is a lowball offer.... 5% premium, if reporting is correct.

Meantime, there is a demerger of AGL assets that may deliver a better outcome for shareholders

Sean K said:

This spells trouble. If we accelerate any further without low/no emission dispatchable 24/7 realised, the air-cons and lights will go out in summer and there'll be riots in the streets. Fed Gov will need to step in here.

Click to expand...

100%.

Base power load.

I would hope the Fed G has someone smart enough to understand that you just can shut down the coal fire stations and keep the lights on.

Tyre Kicker said:

100%.

Base power load.

I would hope the Fed G has someone smart enough to understand that you just can shut down the coal fire stations and keep the lights on.

Click to expand...

If you believe our Fed is intelligent, it is like investing on Queensland Nickel .
the coal stock prices are actually on uptrend with some exception.
so until the panic button is pushed and there is a comfort zone on renewable energy success is really a business case, which is not before 2025-26 (how many governments will change who knows in next 4 years) , coal will be under discussion but will be continued.
Check India and China and their coal energy plants.
I am no expert and this is another wishful thought.

mullokintyre said:

According to Todays Australian Mike Cannon-Brooks has teamed up with Canadian Asset Manager Brookfield to put in a takeover offer for AGL.

This may well be good for existing shareholders of AGL (particularly those who most recently bought in at mid 550's).
Unfortunately, it may not be good for the reliability of of electricity supply as he wants to accelerate the decarbonisation of the energy giant.
Time will tell.
Mick

Click to expand...

They are just after a cheap pickup up of billions of dollars worth of HV electrical infrastructure, isn't FFI in discussions with AGL on one of their sites.
But I must say, this wasn't unexpected, it has been discussed on one of the other threads, but I can't complain did buy in mid Dec $6.04.
So any win is a good win.

Found it, we were discussing it in "the future of power generation and storage thread", boring to most I know.
This article from 8 December 2021
IMHO nothing will happen but a lovely spike in AGL share price. The other thing that may happen is, the AEMO might be given more teeth that we keep talking about on the "other" thread.
Jeez who knows where the media will go with this, it should be entertaining, to say the least.

Tyre Kicker said:

100%.

Base power load.

I would hope the Fed G has someone smart enough to understand that you just can shut down the coal fire stations and keep the lights on.

Click to expand...

I think they would be onto it, nothing worse than handing out head lamps with how to vote cards, when they send you into the booth to vote. ?

Sean K said:

Fed Gov will need to step in here.

Click to expand...

Pure speculation on my part but my guess is the feds will indeed block the takeover.

The idea of someone who owns a network also owning generation and retail falls foul of the rules basically unless it's government, but even in that case government puts them into different entities as such.

It's the business equivalent of the ASX also becoming a stockbroker whilst prohibiting any broker using any competing exchange.

Or of two airports running their own airline flying between the two cities whilst having the ability to determine landing charges for competitors without charging their own airline anything at all.

It'll raise some serious eyebrows regarding the ability to cost shift, overcharge competitors to use the infrastructure and so on. It falls foul of the rules in a way that even governments aren't exempt from - hence why the states which own energy infrastructure put the physical networks and the generation / retail businesses into separate companies, it avoids any accusation of networks giving a price advantage to their own retailer.

My guess is the real motivation is largely political with respect to the upcoming federal election.

I say that since anyone in the energy business knows that the real problems are around building long duration storage and the supply of oil and gas. Coal's closing regardless - someone "promising" to close it is akin to promising that the seasons will change or that renting DVD's will become obsolete. Yep, no need for anyone to make any promises or do something to make it happen, it's happening regardless.

On the physical side, well AGL Loy Yang is for practical purposes a monopoly, there's no identified (by the Australian Energy Market Operator) physical means to operate the grid in Victoria at present without plant running that uses coal from that mine (which AGL owns) and there's very limited circumstances under which it's possible without AGL-owned generating plant (as distinct from plant owned by others but using AGL-supplied coal) running. That's a purely engineering comment not a financial one although it has obvious implications for this proposed takeover.

The details of that circumstance, if anyone really wants to know, can be found in the AEMO Transfer Limit Advice documents - that's a strictly engineering document not economics, business, environment or politics. It does mean that Loy Yang won't be closing anytime soon though, government would almost certainly take a heavy handed approach if the need arose.

Thanks @Smurf1976 , that just burst the bubble that would probably taken AGL to $10 in two weeks.
Have you ever heard the term, too much information. ?

sptrawler said:

Thanks @Smurf1976 , that just burst the bubble that would probably taken AGL to $10 in two weeks.
Have you ever heard the term, too much information. ?

Click to expand...

The background I failed to mention is that Brookfield has already taken over the owners of Victoria's electricity transmission network.

Therein lies the issue and comparisons with an airport owning an airline etc. There's obvious potential to do things with pricing to disadvantage competitors.

Hence even states where government owns the network and also owns a generation business and/or retailer, they're separate companies, with separate management and accounting for that exact reason.

That doesn't necessarily stop a takeover of AGL but there'd be a lot of issues with compliance etc if they didn't sell the (recently acquired) Victorian transmission network at the same time.

Well, unless government turns a blind eye.

Smurf1976 said:

The background I failed to mention is that Brookfield has already taken over the owners of Victoria's electricity transmission network.

Therein lies the issue and comparisons with an airport owning an airline etc. There's obvious potential to do things with pricing to disadvantage competitors.

Hence even states where government owns the network and also owns a generation business and/or retailer, they're separate companies, with separate management and accounting for that exact reason.

That doesn't necessarily stop a takeover of AGL but there'd be a lot of issues with compliance etc if they didn't sell the (recently acquired) Victorian transmission network at the same time.

Well, unless government turns a blind eye.

Click to expand...

Did I hear elections in Victoria and Federal Government are coming ?