The AGL Energy board will meet on Monday morning and is expected to abandon its plan to split its operations, surrendering to a campaign by billionaire climate activist Mike Cannon-Brookes to thwart the measure.
Neither AGL, Australia’s largest electricity generator, nor Cannon-Brookes commented on the meeting, but bankers and consultants told some media over the weekend that the split would be ruled out.
A privileged person told Guardian Australia that the board itself and management functions were “up in the air”, and it looked like Cannon-Brookes had been successful, at least for now.
AGL had scheduled a shareholders’ meeting for June 15 to vote on a plan to separate its generation group into a new company, Accel Energy, and a retail branch, AGL Australia. It needs 75% of shareholders to agree to the plan, scheduled for the end of June.
Cannon-Brookes surprised the company this month when it announced it had bought a 11.28% stake, making it the largest individual shareholder. He promised to block the spin-off, saying it would destroy shareholder value and delay the closure of AGL’s remaining coal-fired power plants.
AGL itself has said the split would entail huge costs, including $ 260 million in advance.
Last week, Cannon-Brookes, through his family business Grok Ventures, said he wanted two seats on the board.
The media, including the Financial Review, reported on Monday that CEO Graeme Hunt would leave AGL as the merger plan was now doomed. Other investors, including the Hesta pension fund, which owned about 0.36%, have also said they would oppose the split.
Earlier this year, Cannon-Brookes joined Canadian asset manager Brookfield in an attempt to take AGL privately for $ 8.25 per share, but was turned down. Shares closed at $ 8.87 on Friday.
The 180-year-old contest on the future comes as wholesale prices rise to record highs of more than $ 300 per megawatt-hour in parts of the domestic electricity market serving the eastern states. of Australia. Rising gas costs and disruptions to coal-fired power plants are the main factors driving up prices.
Crazy graph of the price of electricity number 563:
NSW and QLD third quarter prices closed the week above * $ 300 / MWh *
(..which is above the payment price of the limit and also the “maximum administered price”, if the accumulated price threshold is reached)
🤯🤯🤯🤯 pic.twitter.com/Sjd1xtwnuQ
– Dylan McConnell (@dylanjmcconnell) May 27, 2022
Retail prices are also rising, with the default bid set by the Australian energy regulator last week boosting its standard market bid from July 1 to 18%.
AGL operates three coal-fired power plants in New South Wales and Victoria. Hunter’s Liddell plant has already closed one of its four units and will close the other three next April.
In February, AGL brought forward the closing date of the other two plants, Bayswater in Hunter and Loy Yang A in Victoria, several years in advance. Cannon-Brookes argues that completion should come much earlier and that an intact company would be better equipped to make the transition to a renewable energy and storage giant, helping to significantly reduce Australia’s greenhouse gas emissions in the UK. process.