‘Some board change would be good’: Cannon-Brookes sharpens AGL attack

Australian tech billionaire Mike Cannon-Brookes has sharpened his pitch to AGL shareholders in his bid to derail the company’s proposed demerger, hinting that he would attempt to gain a seat on the energy company’s board if his campaign is successful.

Speaking at an event in Sydney on Friday, the Atlassian co-founder said he was confident the upcoming vote on the proposed separation of Australia’s largest corporate polluter into two separate companies would be voted down by shareholders, suggesting it would be “a clear repudiation by some set of stakeholders … [who] want to go in a different direction.”

“If you ask me, some board change would be good for the share price,” he said.

He added that he was “open to the possibility” to joining AGL’s board. However, his immediate priority was to muster enough support to scuttle the demerger.

AGL Energy chief executive Graeme Hunt and Atlassian founder Mike Cannon-Brookes, who is seeking to block a demerger of AGL championed by Mr Hunt.
AGL Energy chief executive Graeme Hunt and Atlassian founder Mike Cannon-Brookes, who is seeking to block a demerger of AGL championed by Mr Hunt.Credit:Louise Douvis, Justin McManus, Wolter Peeters

In a detailed information memorandum released on Friday, Cannon-Brookes’ investment arm Grok further outlined its reasoning against the proposed demerger, pushing out the deadline for the closure of coal-fired power plants Bayswater and Loy Yang A, from 2030 to 2035.

Cannon-Brookes acknowledged he’d softened his stance on the closure dates due to the slower pace of change in publicly listed companies, but insisted that keeping the plants running for a little longer would still align AGL’s operations with the goals set out in the Paris Climate Accords.

“2035 is probably about the date to get a real, Paris-aligned, productive plan,” he said. “That’s pretty much the deadline you have to get to go to the market and say, ‘we have a Paris plan.’”

Grok’s statement on Friday also said it would like to see AGL support “customer decarbonisation journeys” through green loans as households switch to renewable electricity.

“Moving to 100 per cent electric could cost the average Australian home approximately $100,000.


“We believe converting this capital expenditure into operating expenditure is a challenge AGL can solve for customers. AGL could also offer energy management software to help customers optimise and monetise their generation, storage and connected devices, to minimise customer operating expenditure,” it said in the memo.

They [the board] would have to start listening as a company, and you may need to make some changes with that.

Mike Cannon-Brookes

Cannon-Brookes, one of Australia’s richest people, earlier this month spent $654 million to acquire, via derivative transactions, an 11.28 per cent economic and voting interest in AGL. The company board had earlier this year knocked back two takeover bids from Cannon-Brookes and Canadian asset manager Brookfield.

The suitors were seeking to buy the 180-year-old utilities giant and invest another $10 billion to $20 billion to accelerate the closure of its coal-burning power stations across Australia and replace them with large-scale renewable energy and batteries.

He continued his attack on AGL’s current board, led by chairman Peter Botten and chief executive Graeme Hunt, on Friday, saying that shareholders were “really f–king frustrated” by the current board’s inaction on Paris-aligned targets.

“They [the board] would have to start listening as a company, and you may need to make some changes with that,” he said.

“Our intention would be to … go away and come up with a Paris-aligned plan. Let’s go up and come back with something we can get an ESG rating in the business by saying we’re actually going to plan for managing this transition.”

“And that probably requires more changes, as you mentioned, in the board and management to be forward-thinking, to lean into those opportunities, and to change how we view the future,” he said. “That’s not up to us to do. That’s up to all the shareholders.”

The demerger, proposed by AGL’s management, would split the company into two separate public companies: energy retailer AGL Australia, and energy generator Accel Energy, which would be responsible for the ongoing maintenance of its three power stations.

AGL’s board says its plan should be supported by shareholders because it gives “each company the freedom to pursue individual strategies.”

But Cannon-Brookes, who insists the onus is on the board, rather than himself, to come up with a detailed plan for the decarbonisation of the company, says the plan is “globally irresponsible” and will fail to deliver better outcomes for both shareholders and the environment.

AGL shareholders will vote on the demerger on June 15.

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