AGL buyout on hold

AGL Energy Limited’s campaign to acquire 100 per cent ownership of Loy Yang Power has been stalled by the competition watchdog, Australian Competition and Consumer Commission.

AGL was advised in a letter from the ACCC this week it was “suspending its clearance process” regarding its proposed acquisition of the Greater Energy Alliance Corporation Pty Ltd (owners of Loy Yang A) pending receipt of a response to a ‘further information request’.

The ACCC requested AGL respond to the information request by 18 April.

The announcement delays AGL’s move to buy-out GEAC in its entirety, increasing its existing 32.54 per cent share in the corporation.

The ACCC had previously indicated it anticipated providing a response to AGL’s clearance application on 19 April.

When AGL announced its intention to increase its stake in Loy Yang Power, in February this year, AGL managing director Michael Fraser told The Express the company was “as confident as you can be with ACCC processes” it could be cleared to proceed with its acquisition following a public consultation period, which was set to commence.

AGL’s purchase of GEAC requires ACCC approval and the removal of Federal Court undertakings limiting its ownership of the corporation to a maximum of 35 per cent.

According to its website, the ACCC commenced a review of AGL’s application under the Merger Review Process Guidelines in February.

This week it suspended its timeline and said it would announce a new proposed decision date in due course.

An AGL spokesperson said the company would “obviously comply” with the ACCC’s latest request.

The spokesperson also said an investor roadshow recently undertaken by AGL, which addressed major shareholders, had seen AGL’s share price bounce back.