With the Liberman family sitting on the sidelines and not voting their
19% stake, shareholders in electricity retailer Australian Energy this
morning overwhelmingly voted in favour of selling the company to the
Queensland Government-owned Ergon Energy for $103 million or $1.95 a
share.

Crikey was the only shareholder to speak but chairman Alan Castleman,
who was threatening to sue for defamation in our only previous
encounter, declined to elaborate on any conversations or deals that had
been done with the Libermans.

Based on the numbers, it looks the Libermans didn’t have enough shares
to vote the deal down after Ergon refused to accede to its demands and
lift its offer. A total of 75% of all shares were voted and 99.3% were
in favour. Even if the Liberman family had voted their 19% stake
against it, the 75% approval requirement would still have been met.

Besides, voting down the deal would only have served to junk the share
price and attract the sort of publicity that the super-secretive
Melbourne billionaires hate.

The whole scenario is a triumph for former Victorian Treasurer Alan
Stockdale who broke the vertically integrated SECV up into 15 pieces
and created a world-leading competitive model complete with an active
spot market.

Stockers dreamed of new players entering the game and delivering
benefits to customers – Australian Energy’s prices are an average 6-10%
below the lumbering giants of the industry – and that is precisely what
the company did when it floated five years ago after raising just $8
million.

The sale to Ergon has been a bonanza for the 100 staff who still own
about 40% of the company but Ergon does desperately need their trading
expertise when a full competitive market is finally opened up in
Queensland on 1 July next year.

All up, this is a good corporate story which includes benefits for
customers, innovation, competition and a very tasty return for
Australian Energy shareholders, including the scheming Libermans who
paid an average $1.50 a share for their stake, despite dropping a few
hundred thousands with their botched over-the-odds purchase or an
additional 9% stake to try and force the bid price up.

Peter Beattie’s boys at Ergon didn’t blink, the Australian Energy
shareholders showed no sign of supporting the Libermans and they
remained on the sidelines and embarrassed at today’s EGM.

Peter Fray

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