Brookfield’s game plan in its acquisition of AGL Energy may be to place the business in a fund owned by third-party investors to avoid opposition from the competition watchdog, sources say.
They believe that the Canadian private equity powerhouse, which has Australian tech billionaire Mike Cannon-Brookes fronting its offer, would be betting on a Labor-Green election victory before it made its bid for the $5bn Australian-listed electricity generator and retailer and that the deal would not reach the Foreign Investment Review Board until after the election.
One theory is that the low-ball $7.50-per-share offer at a 5 per cent premium that was rejected by the Peter Botten-led board was part of a strategic plan to prevent the planned demerger of its Accel Energy unit, which was slated to occur before June.
Last week, The Australian reported that the mooted deal by Brookfield and Mr Cannon-Brookes had raised concerns for Australian Competition & Consumer Commission chairman Rod Sims.
Brookfield is already buying Victoria’s electricity transmission operator AusNet.
Big generators such as AGL are typically not allowed to own electricity distribution and transmission companies.
Mr Sims pointed out that no combination of generation and transmission had taken place since the National Electricity Market was created in 1998.
Expectations are now that Brookfield will gradually increase its offer to draw out the saga in the hope a Labor-led government would back a deal as it looks to close down coal-fired power stations by 2030.
Sources expect Brookfield to bring in other partners to own the asset, and remain as manager.
DataRoom reported last week that Brookfield in 2020 made up to $US235m in fees for managing the listed Brookfield Renewable Partners fund, despite it losing money that year.
Brookfield has indicated that AGL is slated for the Brookfield Global Transition Fund that has just raised $US15bn.
The Global Transition Fund will manage energy assets focused on low-carbon energy, sustainability, reducing greenhouse gas emissions and energy consumption.
Shares in AGL on Friday closed at down 11c at $7.49.
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