AGL bosses quit after Cannon-Brookes torpedoes demerger plan
AGL is in turmoil with its chairman, two directors and managing director all quitting today after its planned demerger of its coal assets was scrapped at a cost of $160 million.
Co-founder of Atlassian Mike Cannon-Brookes has spent decades becoming an overnight success. (AAP image).
The decision is a stunning turnaround for the company and major victory for the billionaire Atlassian founder and environmental crusader Mike Cannon-Brookes.
The company had planned to hive off its coal assets into Accel Energy while AGL would continue as a retailing company, but Cannon-Brookes’ investment vehicle Grok Ventures picked up more than 11 per cent of the company’s shares to thwart the plan because he believed it would slow down the transition from coal fired power.
Cannon-Brookes had previously teamed up with Brookfield in a failed bid to take over the company.
AGL today announced the demerger deal was dead because it did not have the 75 per cent shareholder support to carry the proposition. It said it still believed the demerger was the best solution but “this path is no longer available” because of Grok’s plan to vote it down.
Chairman Peter Botten would also resign, along with managing director Graeme Hunt. Directors Jacqueline Hay and Diane Smith-Gander would also resign.
“The board will now undertake a review of AGL’s strategic direction, change the composition of the board and management and determine the best way to deliver long-term shareholder value creation in the context of Australia’s energy transition,” the company said.
“Wow. A huge day for Australia,” Cannon-Brookes posted.
“(I) had to sit down and take it in. We embrace the opportunities of decarbonisation with Aussie courage, tenacity and creativity. Lots of work but we can do this.”
In a statement to the ASX, AGL said Australia was at a pivotal moment and the board was committed to decarbonisation.
“AGL has been in ongoing discussions with key stakeholders in this regard and believes that the relevant dates for closure of coal-fired power stations will continue to be accelerated,” it said.
“The board notes the role of the rapidly changing public policy settings for the energy market, the continuing uplift in wholesale energy prices and the growing expectations of stakeholders will all play in setting the future direction for AGL Energy.”
The board will report back in September on its plans.
The cost of the scrapped demerger so far had been $160 million of the projected $260 million total cost.
AGL shares fell 4 per cent on the opening of the market.
