Energy company AGL has rejected an offer for its ageing Liddell coal-fired power plant in the New South Wales Hunter Valley, committing to shutting it down by 2022.
Alinta, another Australian energy company with backing from Hong Kong based Chow Tai Fook, made an unsolicited offer of $250 million last month.
Alinta said it would invest in upgrading the facility, rumoured to take the total spend to around $1 billion, but AGL released a statement to the sharemarket on Monday morning stating it would not accept the offer.
“AGL has completed a thorough assessment of the offer and, after careful consideration, has advised Chow Tai Fook and Alinta that it would not proceed any further with the offer,” the statement read.
“The AGL board has determined that the offer is not in the best interests of AGL or it’s shareholders.”
The news comes in the face of Government pressure, with Prime Minister Malcolm Turnbull continually pressing AGL to either extend the life of the facility beyond 2022, or sell it.
Former Nationals leader Barnaby Joyce called the decision “BS,” while former Prime Minister Tony Abbott called on the government to compulsorily acquire the plant and sell it Alinta.
Mr Joyce told reporters that closing the coal-fired power stations reduced electricity supply, driving up power prices.
“We need to grab AGL, cart em back in and say this is BS, you’re taking us for a ride, you think we’re fools and the Australian people are not. And they are not going to pay for your market manipulation, which is what’s coming next,” he said.
Mr Abbott went a step further, accusing AGL of wanting to close Liddell to increase the value of it’s other coal-fired assets, calling on the government to intervene.
“The government should compulsorily acquire this power station for the price Alinta was prepared to pay, then they should sell it to Alinta and they can operate it,” he told The Age.
The announcement is the latest chapter in AGL’s efforts to hold on to it’s commitment to close Liddell in 2022.
AGL first announced its intention to close the plant back in 2015, giving seven years’ notice of the shutdown of the 1680 megawatt power station.