Tech billionaire Mike Cannon-Brookes has acquired more than 11 per cent of AGL Energy, becoming its largest shareholder.
- Mr Cannon-Brookes acquired an 11.28 per cent stake in AGL
- He intends to use his stake to vote against a proposed demerger of the company
- AGL rejected a takeover bid by the tech tycoon earlier this year
In a letter sent to AGL’s board of directors last night, Mr Cannon-Brookes announced his private investment group, Grok Ventures, had purchased an 11.28 per cent stake in the energy giant.
The Atlassian co-founder has vowed to vote against a proposed demerger that would see AGL split into two entities.
Under the plan, the company’s coal-fired power stations would sit under the new banner ‘Accel Energy’ and continue to operate until 2045.
The other company, AGL Australia, would focus on its retail operations, supporting 4.5 million customer services.
That decision will be put to a shareholder vote next month.
AGL has stated that it is “committed to delivering the demerger” which it considers is “in the best interest of shareholders.”
“[It] creates the potential to maximize growth in the value of shares by giving each company the freedom to pursue individual strategies and growth initiatives,” it said in a letter published on the Australian Stock Exchange.
“The demerger will create two industry-leading companies that will advance Australia’s new energy future, enabling a responsible transition of Australia’s energy system towards decarbonisation.”
But Mike Cannon-Brookes has labeled the proposed demerger a “flawed plan” and argued that as well as having vast environmental detriments, it didn’t make financial sense.
“AGL Australia and Accel Energy will emerge as two weaker, interdependent entities that are more costly to run,” he said.
“Accel Energy is at significant risk of becoming a stranded asset given its meaningful coal exposure.
“AGL is currently the single largest contributor to carbon emissions in Australia and the emerger will entrench a position that is inconsistent with limiting climate change.
“We fundamentally believe there can be a better future for AGL. 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.”
The share acquisition comes after AGL rejected the tech tycoon and part owner of the South Sydney Rabbitoh’s takeover bid earlier this year.
Meanwhile, AGL this week reduced its after-tax profit forecast for this financial year from a range of $260 million and $340 million, to between $220 million to $270 million.
It has attributed the profit hit to a shutdown of a unit at its Loy Yang A power station in Victoria due to an electrical fault.