In an ASX listing on Tuesday, AGL Energy assured its shareholders that it remained committed to delivering the demerger, which it deemed “in the best interests of shareholders”.
AGL confirmed it still intended to create AGL Australia and Accel Energy by 30 June, despite a late intervention by Mike Cannon-Brookes who has been attempting to prevent the demerger for months.
In his latest move, Cannon-Brookes purchased an 11.28 per cent stake in AGL on Monday through his family firm Grok Ventures, making him the energy provider’s largest single shareholder.
In a letter addressed to the AGL board informing them of his acquisition, Cannon-Brookes unveiled his plans that include blocking the demerger to enable a “better future” for the company.
“We have purchased this substantial interest in the company because we fundamentally believe there can be a better future for AGL,” he wrote.
“A future that delivers cheap, clean and reliable energy for customers. A future that accelerates the transition to net zero, and a future that creates opportunities for AGL and value for its shareholders along the way.”
Cannon-Brookes insisted that the proposed demerger is a “flawed plan” that will fail to achieve these goals.
“As a result, we intend to vote every AGL share we control at the relevant time against the demerger, and will actively encourage all AGL shareholders to do the same.”
But Cannon-Brookes is taking his plight to another level by also launching a website called, “Keep it together Australia” in a bid to enlist support for his vision.
Urging shareholders to vote against the demerger, the website suggests that AGL has “moved too slowly” to decarbonise and adopt new technologies.
“It has underinvested in new and profitable renewables, instead spending more than $1 billion over the last four years to sweat old coal plants that are selling less energy, are unreliable, and are getting more expensive to run.
“The demerger plan retires coal assets up to 10 years too late, making the transition to renewable energy more challenging and costly.”
In March this year, Mike Cannon-Brookes appeared to be walking away from AGL after a revised offer from a consortium led by Brookfield Asset Management and Grok Ventures to acquire the company for $8.25 per share had failed.
Brookfield Asset Management and Grok Ventures made an initial offer for AGL Energy on 19 February, pricing the company at $7.50 per share.
The bid was rejected on the basis that it materially undervalued the company.
Taking to Twitter at the time, Mike Cannon-Brookes said the Brookfield-Grok consortium is “putting our pens down, with great sadness”.
“Our path was the world’s biggest decarbonisation project,” Mr Cannon-Brookes said.
“The board are proceeding with their demerger path. This path is a terrible outcome for shareholders, taxpayers, customers, Australia and the planet we all share.”
Cannon-Brookes’ block comes in the middle of the federal election campaign where climate change and coal are big issues.
Earlier this week, in an interview with 60 Minutes, Cannon-Brookes accused AGL of polluting the planet.
“We can change it by 2030 in a meaningful, meaningful, meaningful way. If we can do that and show its economic show that there is money to be made in doing it, then around the globe, we’ll have 50 Copycat projects and that will be fantastic,” he said.
HESTA disapproves of current demerger plans
Hours after AGL confirmed it would push on with its demerger plans, HESTA CEO Debby Blakey said the fund is pushing for “a timely, orderly transition” to a low-carbon future.
“We’re not convinced the proposed AGL demerger will achieve emissions reduction and coal asset closure aligned with the Paris Agreement, nor that AGL’s plans provide an equitable transition for affected workers or communities,” Ms Blakey said.
She explained that HESTA is unlikely to support the demerger unless “we see a clear strategy to invest in renewables and storage, and strong commitments to close coal-fired power plants earlier than currently proposed”.
“AGL should also provide investors with some certainty that the demerger will not result in emission-intensive assets being taken off listed markets and their lives extended,” Ms Blakey said.
“Our members provide critical health and community services and to support the demerger we will also need AGL to outline substantive plans for supporting impacted workers and their communities”.
AGL forges new partnership
Also on Tuesday, AGL confirmed it has secured Global Infrastructure Partners as a 49 per cent equity investment partner in its Energy Transition Investment Partnership (ETIP) – an investment vehicle designed by AGL for Accel Energy.
AGL CEO and managing director Graeme Hunt said: “There was strong interest shown in ETIP by a number of globally renowned infrastructure investors, and we are excited to have selected Global Infrastructure Partners.
“The establishment of ETIP will support Accel in funding low-carbon developments whilst providing Global Infrastructure Partners exclusive access to a portfolio of investments. If all the Foundation Projects in ETIP were to proceed, it would represent an investment of approximately $4.7 billion into the future of energy in Australia.”
