Sydney, Mar 20, 2006 AEST (ABN Newswire) - The Australian Gas Light Company (ASX: AGL) today rejected Alinta Limited's takeover bid, which repeated the terms of its already rejected February proposal.
AGL Chairman Mark Johnson said the AGL Board had already rejected the 1.773 ratio of Alinta shares for each AGL share, as it was substantially below fair value and comprised wholly of Alinta shares.
Mr Johnson said Alinta's bid was highly conditional and appeared to be designed to frustrate AGL's takeover bid for Alinta.
"The fact remains that Alinta is still seeking board and management control of AGL for a price substantially below fair value," he said.
"It is difficult to take this bid seriously, given the number of broad-based and highly restrictive conditions which have been included.
"The bid has numerous conditions which require AGL to waive rights, take certain actions, provide undertakings or commercial information. As things presently stand we do not see how it would be in the interests of AGL Shareholders to do any of these things.
"By way of example, if AGL proceeds with its own bid, which it fully intends to do, this will give Alinta the right to withdraw its bid."
Mr Johnson said Alinta's claims that AGL had been unwilling to engage in discussions were simply incorrect.
"In recent days I have met with and spoken to Alinta's Chairman-elect on numerous occasions, and our advisers have been in close and continued contact," he said.
"No progress has been achieved in these discussions due to Alinta's refusal to change the terms of its proposal which are fundamentally inadequate.
"The AGL Board is not going to recommend that Shareholders sell their shares in AGL at substantially below fair value and hand over management control.
"AGL shares closed at $17.871 two weeks after Alinta publicly confirmed the sale of its AGL shares in early February, 2006. This was prior to Alinta commencing the acquisition of its 19.9 per cent stake for $19.45 in cash.
"Shareholders should take no action on Alinta's offer."
AGL's merger offer
Mr Johnson said AGL's merger offer for Alinta, using the same ratio, represented fair value for a true merger of both companies and reflected the relative value of each business.
"AGL wants a true merger with the best combination of board and management strengths, which recognises that AGL represents 70 per cent of the combined group and Alinta 30 per cent," he said.
"AGL's proposal of a merger with Alinta and subsequent demerger of the combined group, would result in fully separate and independent energy and infrastructure businesses."
Mr Johnson said AGL's total shareholder returns since the Federal Court decision on Loy Yang A power station in December 2003, were ahead of the ASX200 index and comparable to Alinta, demonstrating AGL's strong track record at delivering its business strategy.
AGL's proposal is expected to generate dividends of at least 88.7 cents per share for the year ending 30 June 2007. This is 14 per cent more than that outlined in AGL's original demerger proposal.
Future cost savings and synergies will support the uplift in dividends beyond 2007. AGL is also finalising a major retail cost-saving program, which should result in savings of $50-60 million per year once implemented.
Mr Johnson said AGL's Bidder's Statement would be sent to Alinta Shareholders in April.
Contact
Contact: Jane Counsel, Media Relations Manager
Direct: + 61 2 9921 2352
Mobile: + 61 (0) 416 275 273
email:jcounsel@agl.com.au
Sue Cato
Direct: +61 (0) 419 282 319
email: cato@catocounsel.com.au
Investors
Contact: Graeme Thompson, Head of Investor Relations
Direct: + 61 2 9921 2789
Mobile: + 61 (0) 412 020 711
email: gthompson@agl.com.au
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