Australian energy giant AGL has abandoned plans to split the business following the intervention of its largest shareholder Mike Cannon-Brookes.
AGL has informed shareholders this morning that it is withdrawing its proposed merger, which was due to be voted on early next month.
For the spin-off to go ahead, 75% of shareholders had to get approval, a goal that AGL now believes would not be met.
Mike Cannon-Brookes became the largest AGL shareholder specifically to kill the spin-off. (new)
In a letter to the AGL board that was also made public, Cannon-Brookes said the June 15 split was a “flawed plan.”
“We intend to vote on all AGL shares that we control at the appropriate time against the split and we will actively encourage all AGL shareholders to do the same,” Cannon-Brookes told the AGL board.
“In our view, the proposed spin-off runs the risk of a terrible outcome for AGL shareholders, AGL customers, Australian taxpayers and Australia.”
The spin-off would have seen AGL split its coal-focused retail operations.
Today, AGL has acknowledged the power of this letter, saying that while most AGL stakeholders still agreed with the split, it was no longer “the best way forward.”
“In these circumstances, the AGL Energy Board considers it in the best interest of AGL Energy’s shareholders to withdraw the proposed spin-off,” the AGL board of directors said.
“AGL Energy will approach the court to ask for orders to cancel the court-ordered scheme meeting and will not proceed to the associated general meeting which should have considered several related resolutions.”
Mike Cannon-Brookes (left) and AGL CEO Graeme Hunt (right). (Louie Douvis) AGL said it will review its strategies taking into account shareholders’ intentions on renewable energy. (Fairfax Media)
Cannon-Brookes’ departure not only ruined AGL’s planned split, but also some of its top charges.
President Peter Botten will resign from the board and CEO Graeme Hunt will also step down as CEO and CEO.
Jacqueline Hey has resigned as non-executive director as of today and Diane Smith-Gander will step down from the board following the release of AGL’s annual results in August.
“While the board believed the proposed merger offered the best way forward for AGL Energy and its shareholders, we made the decision to withdraw it,” Botten said.
“Now, the board will review AGL’s strategic direction, change the composition of the board and management, and determine how best to deliver long-term value creation for shareholders in the context of the energy transition. ‘Australia’.
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