Billionaire Likely to Sell AGL Stake if Demerger Goes Through — Update

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By Stuart Condie

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SYDNEY–Billionaire Mike Cannon-Brookes would likely walk away from AGL Energy Ltd. if he is unsuccessful in corralling a shareholder vote against a demerger of coal plants from its retail operations.

Mr. Cannon-Brookes, the co-founder of Nasdaq-listed Atlassian Corp. and AGL’s largest shareholder, on Friday said he had been encouraged by discussions with large and retail shareholders since he assembled an 11.3% stake in recent weeks. He didn’t name any of the AGL shareholders with whom he had spoken.

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The entrepreneur wants to halt plans by Australia’s biggest polluter to put its aging coal-fired power plants into a separate business that he said would face multiple risks and be unattractive to investors. His plan to be a long-term investor would likely change if the demerger went ahead, he said.

“We would have to respect the vote, there’ll be no crazy Trumpian stuff here,” he told a media audience in Sydney. “We would probably have to seriously consider what we’re going to do.”

AGL in March rejected a takeover proposal from Brookfield Asset Management Inc. and Mr. Cannon-Brookes, which included plans to close the coal plants ahead of schedule and replace them with renewable generation.

AGL has denied that its demerger plan is high-risk and said this month that it would look at accelerating the closure of coal plants following their demerger from the retail operations, without providing further detail.

AGL shares have risen about 20% since the Brookfield-led consortium’s initial approach in February.

Mr. Cannon-Brookes said Friday that he had seen no independent analysis backing AGL’s plans. He wants to see change on the board and would consider joining, he added.

“I’m always open to possibility,” said Mr. Cannon-Brookes, who wants AGL to offer additional consumer services such as rooftop solar financing and energy-management software. “Right now we’re just focused on getting the vote.”

Mr. Cannon-Brookes’s initial tilt at AGL, which the Australian government’s Clean Energy Regulator said is the country’s largest emitter of greenhouse gases, centered on a plan to close its coal-fired generating assets 10 years ahead of AGL’s 2045 target and replace them with clean energy and storage.

Mr. Cannon-Brookes on Friday said he consulted Andrew Vesey, AGL’s former chief executive, over the plan. Mr. Vesey left AGL in 2018 after clashing with government ministers who argued unsuccessfully for the company to extend the operating life of its Liddell coal power station or to sell it.

Mr. Vesey, who has agreed to join Fortescue Metals Group Ltd.’s investment arm to lead its energy transition projects, had planned to move AGL away from traditional hydrocarbons.

“We’re five years behind implementing almost the exact plan that Andy had,” Mr. Cannon-Brookes said. “It’s not like we’re just adopting his plan, but we certainly spent time with him.”

Write to Stuart Condie at [email protected]

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Credit: www.marketwatch.com /

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