Tech billionaire Mike Cannon-Brookes is on a collision course with the nation’s largest electricity producer and carbon emitter over its planned split, which he says entrenches fossil fuels and is “flawed”.
AGL Energy on Tuesday dismissed criticism of the move, saying in a statement to the ASX that the split was in the interests of all shareholders.
The co-founder of Atlassian, a renewable energy funder, took an 11.28% stake in AGL Energy, through its private investment vehicle Grok and its subsidiaries, to become its largest shareholder.
Monday’s revelation came hours after AGL Energy issued a letter to shareholders asking them to support a board plan to split the company into two entities – a green energy retailer called AGL Australia and a coal-fired electricity generator called Accel Energy.
The new entities will aim to reduce emissions to net zero by 2040 and 2047, respectively.
“We will vote against the next flawed merger,” Mr. Cannon-Brookes said on Twitter Monday evening.
He believes AGL Energy can “benefit massively” from the future decarbonisation of Australia’s economy, as the transition will require “electrifying everything and moving our grid to be powered by cheaper and more reliable renewables”.
“The split makes no sense, or pennies,” he tweeted.
“We believe this destroys value for everyone – shareholders, employees, Australia and the planet.”
Power producer and retailer AGL said it remained committed to “a responsible transition of Australia’s energy system” and planned to split the business by June 30.
For the split to succeed, 75% shareholder approval is required in the June 15 vote.
Mr Cannon-Brookes launched a website – Keep it together Australia – setting out his case for shareholders to oppose the split in hopes of securing the remaining 15% or more needed to block the split.
“What I need is for other shareholders to come forward and vote (against the plan),” he told ABC radio on Tuesday.
“This vote is coming very, very fast and so I’m trying to make it clear why this vote is wrong.
“I strongly believe in the future of AGL and the enormous possibilities of the economic transition we are heading towards in terms of decarbonization.”
Asked if rising coal and gas prices are discouraging power producers from decarbonizing, Cannon-Brookes pointed to higher electricity bills for households.
“The price of wind and sun has not changed at all due to the instability,” he said.
“The problem we have here is the entry cost of energy.
“If you’re running renewables, you don’t have these price increases, which leads to lower prices.”
But Queensland LNP Senator Matt Canavan, a pro-coal MP, thinks otherwise.
“We have to keep our coal-fired power stations open because otherwise people will pay dearly for their electricity bills,” he told Sky News.
“Mike Cannon-Brooks is good at technology, but his policy, if applied to energy, would be an absolute disaster for our country.”
Earlier this year, Mr Cannon-Brookes launched an unsuccessful takeover bid for AGL worth around $9 billion, plus debt, through a consortium.
The consortium wanted to privatize the company, shut down its coal-fired power plants about 10 years early, and spend $20 billion developing renewable energy and battery storage.
AGL shares were trading at $8.38, down 2.78%, as of 11:00 a.m. AEST on Tuesday.
The consortium’s final offer in March was $8.25 per share, which was rejected by the board.
Australian Associated Press