Tech billionaire Mike Cannon-Brookes launches company raid on energy producer AGL


Australian tech billionaire and local weather activist Mike Cannon-Brookes has purchased an 11.28 per cent stake in AGL Power in a company raid to dam a proposed demerger that may break up the corporate’s coal-fired energy vegetation from its retail enterprise.

Cannon-Brookes, co-founder of software program firm Atlassian, stated the demerger was “globally irresponsible” and that he was working to influence different shareholders to vote it down, arguing that the money needs to be used to put money into renewables.

The transfer comes two months after he and Canadian funding group Brookfield Asset Administration provided to purchase AGL for $3.84bn. Brookfield and Cannon-Brookes had proposed to take AGL personal, hasten the closure of its coal vegetation and make investments A$20bn (US$14bn) on renewable technology to switch the coal.

The AGL board rejected the consortium’s first and second provide, saying they undervalued the corporate. Brookfield and Cannon-Brookes stated they would make no additional gives.

However in a letter to the AGL board on Monday, Cannon-Brookes signalled he had not given up on his ambition to affect the corporate.

“We essentially imagine there generally is a higher future for AGL . . . A future that accelerates the transition to web zero, and a future that creates alternatives for AGL and worth for its shareholders alongside the way in which,” he stated.

“We firmly imagine the proposed demerger is a flawed plan that can fail to realize these targets. In consequence, we intend to vote each AGL share we management on the related time in opposition to the demerger, and can actively encourage all AGL shareholders to do the identical.”

A spokesperson for Cannon-Brookes stated there was no plan to make a brand new provide to purchase the corporate outright. Brookfield stated it was not concerned within the transfer.

AGL is one in every of Australia’s largest power corporations, with greater than 4mn prospects, three giant coal vegetation and a lot of renewable technology belongings. It’s Australia’s greatest carbon emitter, producing about eight per cent of the nation’s greenhouse gasoline emissions.

Cannon-Brookes, who took the stake by his personal funding fund Grok Ventures, argued that AGL’s plan to separate the coal vegetation from the retail enterprise would miss the chance to make use of the corporate’s stability sheet to put money into renewable technology.

“AGL is at the moment the one largest contributor to carbon emissions in Australia and the demerger will entrench a place that’s inconsistent with limiting local weather change,” he stated.

He stated the retail facet of the demerged firm, AGL Australia, would proceed to supply the vast majority of its power from the coal technology enterprise, to be known as Accel Power.

The 11.28 per cent stake value Cannon-Brookes greater than A$650mn. A spokesperson stated that was solely funded by Grok, the non-public funding automobile of Cannon-Brookes and his spouse. Cannon-Brookes is Australia’s fourth-richest individual with an estimated web value of A$26bn, in line with a March checklist printed by The Australian newspaper.

AGL shareholders will vote on the proposed demerger in June. The deal wants 75 per cent of votes in favour to undergo. Cannon-Brookes believes he can persuade sufficient shareholders to oppose the demerger to make sure it’s blocked.

In a letter to shareholders on Monday — earlier than Cannon-Brookes acquired his stake within the firm — AGL’s chair Peter Botten stated the board was dedicated to the demerger. “AGL Australia and Accel Power will probably be established with robust foundations for future success and development as unbiased, ASX-listed corporations,” he stated.

Local weather Capital

The place local weather change meets enterprise, markets and politics. Discover the FT’s protection right here.

Are you interested in the FT’s environmental sustainability commitments? Discover out extra about our science-based targets right here

Leave a Reply

Your email address will not be published.