What Happened to the AGL Energy Share Price?
AGL Energy Limited [ASX:AGK] closed 2.83% higher on Thursday. Their power portfolio includes base electricity generation (from both fossil and non-renewable fuels), as well as wholesale and retail services.
Why Did This Happen to AGK Shares?
On Wednesday, AGL won an appeal against an ACCC ruling. Previously the ACCC stated AGL Energy couldn’t purchase the assets of Macquarie Generation (MacGen). MacGen is a base load electricity producer in New South Wales.
The Australian Competition Tribunal ruled AGL’s $1.5 billion acquisition of MacGen assets ‘is not likely to result in a significant detriment to the ability of retailers, including small retailers to compete in the NSW electricity market.’ New South Wales is AGL’s largest electricity market with more than 800,000 customers.
What Now For AGL Energy Limited?
AGL’s share price has risen 43 cents higher to $15.61 today. However, it’s still below its 52 week peak of $16.27 in May 2014.
The energy company is a volatile stock. Share prices have traded $13.97 to $16.27 this year. AGL pays a good dividend. For the last financial year, it was $1.23 per share, up from 56 cents per share in 2012. In spite of the volatility, it is a good stable dividend payer.
This new acquisition should see revenues increase in the 2015 financial year.
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Shae Smith+
Editor, Money Weekend
