AGL Energy Limited (AGL) announced that it has entered into a conditional agreement offering to acquire 100% stake of Southern Phone Company Limited (SPC), one of Australia’s largest regional telecommunications businesses with 100,000 customers nation-wide. The proposal is part of AGL’s plans to pursue growth in the convergence of energy and data, which we believe will bring significant benefits to our customers. The offer, if accepted, would see the acquisition of all issued capital of SPC, from its current 35 local council shareholders for AUD 27.5 million (US$ 18.82 million).

AGL intends to maintain SPC’s business operations, brand and unique product offerings focused on regional customers. This agreement is subject to a number of conditions, including acceptance by SPC shareholders of AGL’s offer.

Formed in 2002 under the Federal Government’s Networking the Nation scheme, Southern Phone’s current constitution limits ownership to Australian local government shareholders and it can only self-generate capital. Although community ownership has been a strong tenet of the business in the past, now is the right time to change the structure and establish the ability to leverage shareholder capital.