Tech billionaire Mike Cannon-Brookes and his partners Brookfield Asset Management are set to abandon their takeover bid for energy giant AGL, after the electricity company rejected a second offer worth around $9 billion.
Canadian investment firm, Brookfield, and Mr Cannon-Brookes' Grok Ventures, made an increased offer of $8.25 a share, a 75 cent per share increase from the original $7.50 bid made a fortnight ago.
The revised pitch was around a 10 per cent increase on the original $8 billion bid and was made on Friday afternoon.
AGL Energy's board met over the weekend and decided to reject the offer.
In an update to the ASX on Monday morning, AGL told the market the offer was "still well below the fair value of the company".
It said the latest raised offer was "otherwise materially the same" as the first offer made in February.
AGL's chairman Peter Botten said the latest proposal "continues to ignore" the value of the company's proposed demerger.
He said the demerger would create two separate companies that would have a better overall value to the market.
Brookfield and Grok Ventures are now expected to walk away from the takeover push. The Canadian firm was funding about 80 per cent of the bid.
“The Consortium is withdrawing from the process to take AGL private and believes that the company’s demerger proposal is not in the interest of shareholders, consumers or the planet," a source close to both parties said.
AGL Energy rejected the original $8 billion takeover bid two weeks ago, which included plans to accelerate the closure of AGL's major coal-fired power stations.
In a tweet, Mike Cannon-Brookes said: "The Brookfield-Grok consortium looking to take private and transform AGL is putting our pens down — with great sadness."
In response to the first offer, AGL's board said it remained committed to progressing the proposed demerger of AGL Energy to establish two separately listed businesses, AGL Australia and Accel Energy.
It said it considered the proposed demerger would deliver better value for shareholders.
"In the absence of a proposal that provides appropriate value to AGL Energy shareholders on a control basis, the board continues to believe the demerger maximises value for shareholders and is in the best interests of shareholders," the company said in a statement to the stock exchange related to the original bid.
In a tweet, Mr Cannon-Brookes described the demerger path as a "terrible outcome for shareholders, taxpayers, customers, Australia and the planet we all share".
