While the consortium’s strategy for AGL’s future may align with investors’ views, the group may need to raise its $7.50-a-share offer price if it is to win shareholder support. AGL last week said the offer, a 4.7 per cent premium on its February 18 closing price, “materially undervalued” the business. “If you’re going to try to take control of a company ... then you need to go into it the way it would normally happen in the corporate world, and you pay a ‘control premium’ which typically is 30, 40, 50 per cent, depending on the circumstances, over and above what the company trades at,” AGL chief Graeme Hunt said.

Loading

AGL’s existing commitment to bring forward the closure of its Bayswater plant in NSW by two years to 2033, and Victoria’s Loy Yang A plant by three years to 2045, was “responsible and considered”, Mr Hunt added, while the consortium’s plan to quit coal by the end of the decade would “jeopardise energy security and energy affordability”.

“We are not saying there shouldn’t be an energy transition,” he said. “We are just saying we know what is possible, and we are doing that, and we are going to review that year in year out and manage our changeover plans, accelerate them where appropriate.”

Mr Hunt said shareholders had gained a better understanding of the value set to be unlocked by AGL’s plans to demerge its coal assets into a new entity called Accel Energy later this year, and were “extremely unimpressed” with the value implied in the consortium’s offer.

Not all investors, however, appear convinced by AGL’s strategy. UBS analyst Tom Allen said some investors had been critical of AGL’s ability to articulate the long-term value of demerging, and warned any bids for AGL in its existing structure may raise the risk of shareholders rejecting the demerger in a vote planned for June 22.

BlackRock and Vanguard have declined to comment on the takeover offer.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.