The Australian share market has dropped on Monday, while AGL shares surged on news the energy company had rejected a takeover bid from Atlassian-founder Mike Cannon-Brookes.
- The ASX has fallen at the open
- AGL has rejected an unsolicited $7.50 a share offer from Atlassian-founder Mike Cannon-Brookes
- Health and real estate were the strongest sectors on the ASX in early trading
At 10:40am AEDT, the benchmark ASX 200 index was down 7 per cent, to 71,172. The broader All Ordinaries had also shed about 0.7 per cent per cent, to 7,445.
The Australian dollar was flat and buying 71.75 US cents.
Healthcare and real estate were the strongest sectors in early trading.
AGL stocks soared 7.9 per cent after announcing its board had rejected a takeover offer from Atlassian billionaire Mike Cannon-Brookes and Canada’s Brookfield Asset Management.
AGL said the unsolicited bid of $7.50 a share undervalued the company.
“The proposal does not offer an adequate premium for a change of control and is not in the best interests of AGL Energy shareholders,” AGL Chairman Peter Botten said.
Mr Botten said the cash proposal, with an option for AGL shareholders to elect a scrip alternative, also provided limited information about how the deal would be structured.
AGL is pushing ahead with its demerger plans to separate its retail business from its energy-producing business, which includes coal-fired power plants.
“The board is confident that the demerger will create a strong future for both parts of the business,” Mr Botten said.
The offer from Mr Cannon-Brookes, who wants to buy the energy company and bring forward the closure of its coal-fired power assets to 2030, is unlikely to be his last.
Mr Cannon-Brookfield recently bought electricity transmission company, Ausnet.
Other stocks leading the ASX 200 were Endeavour Group (+10.6pc), Chorus Limited (+7.6pc), The A2 Milk Company (+5.4pc) and Orara (+2.1pc).
The worst performing stocks were Altium Limited (-9.9pc), Polynovo (-5.9pc), Super Retail Group (-5.6pc), Pointsbet Holdings (-5.1pc) and Life360 (-4.6pc).
Read More: ASX down, AGL rejects Atlassian-billionaire’s takeover bid