Activist company

Climate activist wins 11% of AGL Energy in Australia, to vote against splitting the company

Mike Cannon-Brookes, CEO of Atlassian, attends the Allen and Co. Sun Valley annual media conference in Sun Valley, Idaho, U.S., July 11, 2019. REUTERS/Brendan McDermid/Files

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  • Cannon-Brookes grabs stake ahead of split vote
  • AGL plans to split into retailer and coal power producer
  • AGL gains 20% since rejection of takeover bid in February

MELBOURNE, May 2 (Reuters) – Mike Cannon-Brookes, tech billionaire and climate activist, said he had acquired an 11.28% stake in Australian firm AGL Energy (AGL.AX), a move that followed the the company’s rejection of a $3.8 billion takeover. offer he made with Brookfield Asset Management.

Grok Ventures’ off-market purchase of Cannon-Brookes seeks to block a plan by the nation’s largest power producer and polluter to split into two companies – a plan that Cannon-Brookes called “flawed” in a letter to the AGL Board of Directors.

“As a result, we intend to vote against the split for each AGL share we control at the appropriate time, and we will actively encourage all AGL shareholders to do the same,” he said in the letter. which was released to the media.

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As of Monday’s close, an 11.28% stake was valued at A$654 million ($460 million).

Cannon-Brookes told AGL’s board that the split would “strengthen a position inconsistent with limiting climate change” and urged the board to disclose its letter to the Australian Stock Exchange so other shareholders are aware of its intention to vote against the split. .

To move forward, AGL’s plan requires the approval of 75% of the votes cast. With Cannon-Brookes holding 11.28% of the shares, only another 14% would have to oppose the split for the split plan to be stalled.

AGL said its board is committed to completing the proposed split which will be put to a shareholder vote in June. The company intends to split into an energy retailer, called AGL Australia, and a coal-fired power generation company, called Accel Energy.

“The split from AGL Energy is on track to be completed by the end of next month,” he said in a statement before receiving Cannon-Brookes’ letter.

In a tweet on Monday, Cannon-Brookes, co-founder of software company Atlassian Corp (TEAM.O), posted a sunset photo of the New South Wales Highlands, saying: “A beautiful country that we are lucky to live in. Let’s keep it that way.”

In his letter, he said AGL Australia and Accel would “become two weaker, interdependent entities that are more expensive to run” and said he expects their total value to be worth less than the current value of each. ‘AGL.

Earlier this year, Grok and Canadian firm Brookfield Asset Management jointly bid for AGL, with the aim of shutting down its coal-fired power plants several years ahead of their scheduled closure.

AGL shares have jumped 20% since Feb. 18, the last trading day before AGL announced it had rejected the takeover bid. The offer was later softened but also turned down.

($1 = 1.4158 Australian dollars)

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Reporting by Sonali Paul; Editing by Edwina Gibbs

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