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James Mccullough

February 18, 2007

AGL Energy is expected to secure a strong foothold in the booming Queensland electricity market, buying government-owned retailer Powerdirect for $600 million.

The acquisitive energy company is expected to be named as early as today as the successful bidder, offering to pay more than chief rival TRUenergy.

It is understood the third candidate, Babcock and Brown, has not been able to generate the synergies and price available to the two existing national retailers.

A price of well over $1000 a customer is tipped, or up to $600 million for the 400,000 customers located in Brisbane and the Sunshine Coast, as well as 45,000 small business customers in Victoria, NSW and South Australia.

“They have paid a high price and I think, at the end TRUenergy did not want to go that high,” one insider said.

The State Government already has secured $1.2 billion from Origin Energy for Sun Retail, nearly $500 million more than analysts expected, and $75 million from AGL Energy for Sun Gas.