AGL declines offer to sell Liddell

On 30 April 2018, AGL Energy Limited received an unsolicited, non-binding, highly conditional indicative offer from Chow Tai Fook Enterprises and Alinta Energy Pty Limited to acquire the Liddell Power Station, associated assets and the related site for a cash consideration payable to AGL of $250 million (the Offer).

AGL has completed a thorough assessment of the Offer and, after careful consideration, has advised Chow Tai Fook and Alinta that it will not proceed any further with the Offer. The AGL Board has determined that the Offer is not in the best interests of AGL or its shareholders. The Offer significantly undervalues future cash flows to AGL of operating the Liddell Power Station until 2022 and the repurposing of the site thereafter.

In considering the Offer, AGL sought external expert advice on matters relevant to the Offer, including the capital expenditure requirements across all plant components and the reliability and safety profile of the ageing power station. Consequently, AGL has reaffirmed its decision to close Liddell in December 2022 and will continue progressing its NSW Generation Plan, which includes repurposing Liddell. The Australian Energy Market Operator has confirmed that completion of this Plan will address the capacity shortfall that may occur as a result of Liddell’s closure.