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Grok Ventures announced late yesterday that it had now become the largest shareholder in AGL, saying the planned demerger on June 15 was a “flawed plan”.
“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,” Mr Cannon-Brookes told AGL’s Board in a letter which he disclosed publicly.
“In our view, the proposed demerger risks a terrible outcome for AGL shareholders, AGL customers, Australian taxpayers and Australia.”
Grok listed three key reasons why it planned to vote against the demerger, which included claims it will destroy shareholder value, one of the split companies will fail and that a demerger would be “globally irresponsible”.
Mr Cannon-Brookes is currently Australia’s third richest person, estimated by the Australian Financial Review to have a personal net worth of $20.1 billion.
He founded software juggernaut Atlassian along with Scott Farquhar, currently ranked Australia’s fifth richest person with $20 billion.
A passionate campaigner for the transition to renewable energy, Mr Cannon Brookes told AGL that he wishes for the company to spearhead this transition.
“As the largest shareholder, Grok wants AGL to thrive. This demerger vote brings us to a critical juncture in Australia’s energy transition, and in AGL’s future. We believe AGL can build on its proud 180-year history as a pioneer in energy innovation if it takes the right step today,” he wrote.
“AGL’s 4.5m customer accounts want clean, reliable and low-cost energy. We believe that as a whole AGL will be a more resilient company, able to transition more quickly and better compete in a rapidly changing energy environment due to the benefits of scale and vertical integration.
“We need to keep AGL together.”
AGL is putting the demerger to a shareholder vote on June 15, where it will need approval from 75 per cent of shares to go ahead.
Under proposed plans, AGL would be split into two entities: AGL Australia which would remain a multi-service energy retailer and Accel Energy which will focus on providing low-cost electricity.
Both companies would be independent and traded on the ASX.
Mr Cannon-Brookes says he believes Accel Energy would become a “stranded asset” if created and AGL Australia would be too reliant on fossil fuels.
“AGL is currently the single largest contributor to carbon emissions in Australia and the demerger will entrench a position that is inconsistent with limiting climate change,” he wrote.
“Under the demerger proposal, AGL A will continue to source a majority of its energy from Accel Energy, which today generates electricity with 50% higher emissions intensity than the rest of the grid.
“We believe this exposure to coal fired power generation is inconsistent with your proposal that AGL A will be a leader in sustainability.”
At the time of publishing in the first few minutes of trade AGL Energy’s share price had dropped 0.46 per cent to $8.58.