AGL

AGL Energy is abandoning plans to split into two separate entities after opposition from billionaire Mike Cannon-Brookes.

AGL's board said it will now "review" the company's strategic direction and will consult with Grok Ventures and other key shareholders and stakeholders, including government and regulators. Shareholders were due to vote on the demerger plan on June 15. "The board of AGL Energy continues to believe that the demerger proposal offers the best way forward for AGL Energy and its shareholders, and this was also the view of the independent expert," the company said in a statement on Monday.

AGL Energy has ditched its plan to split into separate generator and retailer arms, capitulating to the billionaire climate activist Mike Cannon-Brookes' ...

Cannon-Brookes argues that the termination needs to come much sooner and that an intact company would be better equipped to make the transition to a renewable energy and storage giant, helping to lower Australia’s greenhouse emissions significantly in the process. Earlier this year Cannon-Brookes joined the Canadian asset manager Brookfield in a bid to take AGL private at $8.25 a share but was rebuffed. That review would consider how AGL can create shareholder value “in an environment where pressure on decarbonisation and energy affordability is accelerating”, the company said. He vowed to block the demerger, saying it would destroy shareholder value as well as delay the closure of AGL’s remaining coal-fired power plants. In the wake of the decision, AGL said its chairman, Peter Botten, would resign from the company’s board upon the appointment of an independent replacement. Rising costs for gas and outages at coal-fired power stations are the main factors pushing prices higher.

AGL Energy is abandoning plans to split into two separate entities after opposition from billionaire Mike Cannon-Brookes.

The dumping of the demerger means a number of AGL board and management heads will roll. "The board of AGL Energy continues to believe that the demerger proposal offers the best way forward for AGL Energy and its shareholders, and this was also the view of the independent expert," the company said in a statement on Monday. Shareholders were due to vote on the demerger on 15 June.

ACCR is commenting on AGL Energy's (ASX:AGL) withdrawal of its demerger proposal, and the departure of four directors from the board.

0 0 2 2 Ms Rosenberg is currently on parental leave. New leadership must be brought in to take the company forward.

AGL, the largest Australian electricity provider, has abandoned a controversial plan to split its coal-fired power plants from its retail electricity ...

Patricia McKenzie and Mark Bloom remain on the board. Chair Peter Botten and chief executive Graeme Hunt will resign following the appointment of replacements. Shareholders had been set to vote on June 15 on a proposed split of AGL’s retail operations from its ageing carbon-intensive assets. As well, by creating a standalone company for its giant coal-fired power stations, to be known as Accel Energy, the board said it could have focused on transforming those sites into higher-value energy “hubs” including renewables, batteries and even hydrogen. “2035 is probably about the date to get a real, Paris-aligned, productive plan,” he said earlier this month. The company’s third coal-fired power station, Liddell, is due to close next April.

AGL Energy is abandoning plans to split into two separate entities after opposition from billionaire Mike Cannon-Brookes.

AGL's board said it will now "review" the company's strategic direction and will consult with Grok Ventures and other key shareholders and stakeholders, including government and regulators. Shareholders were due to vote on the demerger plan on June 15. "The board of AGL Energy continues to believe that the demerger proposal offers the best way forward for AGL Energy and its shareholders, and this was also the view of the independent expert," the company said in a statement on Monday.

AGL has been thrown into crisis as it suspends long-held plans to spin off its coal-fired power stations following intensifying pressure from tech ...

“AGL Energy has spent approximately $160m to date on the failed demerger proposal,” RBC Capital Markets analyst Gordon Ramsay said. Instead, the board said it would launch a strategic review of the company’s future direction, and report back to shareholders in September. Meanwhile, they had argued that housing AGL’s giant power stations into a separate company, Accel Energy, would enable a greater focus on transforming coal sites into energy hubs that could also house renewables and batteries. “We need the talent in the company to make this transition. Analysts on Monday said it appeared AGL’s planning for a new strategic direction was “back to square one”, and described the failed demerger as an “expensive exercise”. In its statement, the board on Monday acknowledged Australia was at a pivotal moment in the clean-energy transition, and believed the coal plant closure dates would “continue to be accelerated”.

Key points · AGL has abandoned plans to split its coal-fired power plants from its retail electricity business. · Chairman Peter Botten and chief executive Graeme ...

“AGL Energy has spent approximately $160m to date on the failed demerger proposal,” RBC Capital Markets analyst Gordon Ramsay said. Instead, the board said it would launch a strategic review of the company’s future direction, and report back to shareholders in September. Meanwhile, they had argued that housing AGL’s giant power stations into a separate company, Accel Energy, would enable a greater focus on transforming coal sites into energy hubs that could also house renewables and batteries. “We need the talent in the company to make this transition. Analysts on Monday said it appeared AGL’s planning for a new strategic direction was “back to square one”, and described the failed demerger as an “expensive exercise”. In its statement, the board on Monday acknowledged Australia was at a pivotal moment in the clean-energy transition, and believed the coal plant closure dates would “continue to be accelerated”.

On Friday evening, major institutional shareholder Martin Currie called AGL's board to deliver the news that it would be voting against the merger, ...

As last week progressed Grok thought it was polling ahead two-to-one on the retail vote. AGL was seriously exposed on this front. And if it lost ground on any of them, it would lose. The Cannon-Brookes team could have romped home or just scrapped over the line by securing 25 per cent of those voting to blow up the demerger plan. The four directors who will now remain with AGL were backseat passengers in a demerger bus driven by chief executive Graeme Hunt and chairman Peter Botten. He successfully lobbied enough shareholders to vote down AGL’s demerger plans but in terms of shareholder democracy his 11.2 per cent isn’t enough.

Australia's biggest electricity supplier and carbon emitter – AGL Energy (ASX: AGL) – faces a very uncertain future after the withdrawal of its board plan ...

The end of the demerger also means the company has wasted around $160 million progressing the demerger and will also have ramifications for how it arranges its debt portfolio. All of which left the remnants of the AGL Board to come up with some reasonably fast way of patching up the gaping holes in its board and executive ranks and to cast a vision of a meaningful future for a company that has effectively burned through massive amounts of shareholder wealth by paying very fancy prices for big coal fired generators. However, his direct shareholding is not big enough to control the direction of the entire company or even to necessarily guarantee two board seats and it is unclear where that direction is going to come from or even how quickly he will be granted a seat at the board table.

Investors say a refreshed board was needed and are demanding a quicker exit from coal power to meet official climate targets.

He said experience in energy industry, technology and transition would be important, but also “a bit of a fight”. “We have had zero thought about it, haven’t mentioned the word,” Mr Cannon-Brookes said. Sydney-based AGL said it believed the demerger, on which it has spent $160 million out of a total expected cost of $260 million, would have been supported by a majority of shareholders, both retail and institutional. But it was seized on as a “great day” by 11.28 per cent shareholder Mr Cannon-Brookes and welcomed by institutional investors Martin Currie and HESTA, all of which are demanding AGL adopt a business plan aligned with the Paris climate accord. It would have also helped AGL Australia to secure bank funding separate to Accel, while Accel was supported by a $2 billion deal with Global Infrastructure Partners for renewables investment. “We’re long-term investors and interested in the long-term outlook. Connect with Angela on Sign up to our weekly Carbon Challenge newsletter. AGL is currently planning to run its Loy Yang A generator in Victoria until as late as 2045, a date Mr Cannon-Brookes says is just not realistic in any case. How do you maximise value for AGL in 10 years in achieving energy transition? Mr Cannon-Brookes said with the merger now scrapped, his focus was turning to his second goal of board renewal, ahead of the third, which was to set AGL along a Paris-aligned path, which he described as “the greatest decarbonisation project on the face of the planet”. “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.”

UBS analysts reckon the market may be missing one of Mike Cannon-Brookes' big reasons for investing in AGL Energy.

Sarah Thompsonhas co-edited Street Talk since 2009, specialising in private equity, investment banking, M&A and equity capital markets stories. Connect with Anthony on He has 10 years' experience as a business journalist and worked at PwC, auditing and advising financial services companies.

The billionaire investor has at least one non-negotiable element to his demands - that AGL does not attempt to sell off either of its two businesses.

All this goes to demonstrate that Cannon-Brookes has so far only won a mandate to stop a demerger. Cannon-Brookes will clearly want the AGL board to accept his request for two board positions, and has already got a list of preferred candidates drawn up. (The current chief executive, the badly bruised Graeme Hunt, announced he was leaving when a replacement was found.) Now that tech billionaire Mike Cannon-Brookes has eviscerated AGL’s corporate strategy and annihilated its board comes the really hard part - working with what’s left of its depleted governance team. Thus Cannon-Brookes would be keen to get his candidates around the board table in order to have a say on who will take the most important roles in AGL - that of the new chairman and the new chief executive. But interestingly, he is not asking for either of his nominees to be the chairman, and is happy for that role to be taken by an independent.

Cannon-Brookes' investment arm, Grok Ventures, welcomes AGL's demerger backdown and will seek input into 'strategic review' and board renewal.

Our position is steadfast that AGL needs to be kept together as an integrated company.” Through Grok Ventures, Cannon-Brookes acquired an 11.3 per cent stake in AGL Energy – making him the company’s single largest shareholder. Two other board members, Jacqueline Hey and Diane Smith-Gander, will also vacate their positions.