* AGL Energy launches $900 million share sale
* Watchdog okays AGL's A$448 mln power station buy
* AGL rights shares offered at 22 percent discount
* Deal seen going through June 30
* AGL affirms 2012 guidance
(Adds detail, comment)
By Miranda Maxwell and Rebekah Kebede
MELBOURNE, May 24 Australia's AGL Energy
launched a A$900 million ($875 million) share sale
after winning approval from Australia's competition watchdog to
take full control of Victoria state's largest power station
The A$448 million plan to take full control of Loy Yang A
power station, which provides 30 percent of Victoria state's
electricity, also includes Australia's largest brown coal mine.
AGL will buy out Great Energy Alliance Corp, whose
shareholders include troubled Tokyo Electric Power Co,
which has a 32.5 percent stake, Thailand's Ratchaburi
Electricity and Australian superannuation funds.
"There's a little bit of uneasiness with the exposure
they've got to this brown coal activity," Peter Strachan, an
analyst with Stock Analysis in Perth said.
"At the same time, if you're banking on a change of
government by the end of next year, it may well be that the
penalties which are involved in running a project like that be
A controversial carbon tax on Australian industry starts in
July but the opposition Liberal party, which is well ahead in
the electoral polls, has vowed to scrap the carbon tax if it
wins power. See.
"We have fully factored in the price path for carbon," AGL
Chief Executive Michael Fraser told journalists by telephone on
Fraser said markets were pricing a 50/50 chance the carbon
tax would be reversed by 2014 and said Loy Yang was a high
quality generation asset with a long term fuel resource.
"We are buying this at what we think is at or near the
bottom of the market," Fraser said.
"We have made no heroic assumptions about wholesale
electricity prices," he said, adding AGL expected the market
would be very soft over the next few years.
On clinching approval on Thursday, AGL immediately launched
a 1 for 6 rights share offer at A$11.60 each, a 22 percent
discount to its closing price on Wednesday. Around 78 million
new AGL shares, or 17 percent of issued capital, would be
The proceeds would fund the deal and pay off some of the
A$2.5 billion net debt owed by the target.
The deal is expected to add to AGL's earnings from fiscal
The watchdog, the Australian Competition and Consumer
Commission (ACCC), said the purchase could go ahead due to
strong competition provided by other generators, and potential
for new investment.
AGL affirmed it expects underlying 2012 earnings of A$470
million to A$500 million.
Shares in AGL were placed on a trading halt. The stock last
traded at A$14.93, off a January closing low of A$13.58.
($1 = 1.0289 Australian dollars)
(Reporting by Miranda Maxwell and Rebekah Kebede, Editing by