Atlassian co-founder Mike Cannon-Brookes to block AGL demerger

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Atlassian co-founder Mike Cannon-Brookes has made a huge play that could alter Australia’s energy landscape.

Australian tech billionaire Mike Cannon-Brookes says he will use his new stake in power supplier AGL to steer it towards a clean energy future instead of burning coal for what could be another two decades.

The Atlassian co-founder on Monday evening announced his investment firm Grok Ventures had acquired an 11.3 per cent stake in AGL and in doing so made him the power company’s largest shareholder.

The play comes months after Mr Cannon-Brookes made a couple of unsuccessful joint bids with Canadian fund manager Brookfield to buy AGL outright and accelerate the company’s transition away from producing coal-fired power.

The rich-lister again cited environmental and corporate responsibility as a key motivator for his latest buy-in.

He announced he would be using his new stake in AGL to vote against splitting the company’s heavy-emitting assets out into a new business and effectively nix plans to continue to produce coal-fired power until the 2040s.

The proposed demerger needs the support of 75 per cent of AGL shareholders at the June meeting and Mr Cannon-Brookes says he is confident enough people are concerned with the economics to join him in blocking the split.

“We are at a critical point in Australia’s energy transition and in AGL’s future,” Mr Cannon-Brookes said.

“This is about delivering cheap, reliable and clean energy to millions of families and businesses.

“We believe by keeping the company together, AGL can continue its long and proud history as a pioneer through energy market transitions.”

Mr Cannon-Brookes said blocking the company’s split into “clean” and “dirty” energy businesses would also benefit other shareholders, highlighting the ongoing technical troubles at the coal-fired Loy Yang plant as evidence it was time to make changes.

“By not transitioning fast enough away from fossil fuels, the board has presided over AGL’s value plummeting to the tune of about 70 per cent in five years,” Mr Cannon-Brookes said.

“Sweating old coal plants, which are expensive to run and increasingly breakdown like we’re seeing today with Loy Yang A, is not economical or responsible. It makes no sense … or cents.“

Ultimately, Grok Ventures firmly believes the AGL demerger will create two weaker, interdependent companies with significant operating risk and dis-synergies.

“We intend to vote every AGL share we control at the relevant time against the demerger, and we call on fellow AGL shareholders to vote against the demerger to avoid further value destruction,” Mr Cannon-Brookes said.

AGL said it had not been contacted by Grok Ventures and was standing by plans to demerge.

The company’s ASX-listed shares were down 2.2 per cent at $8.43 after 50 minutes of trade on Tuesday, having slipped 0.7 per cent on Monday on news of a profit downgrade.

AGL supplies about a third of Victoria’s power and its gas and coal power stations are the biggest greenhouse gas emitters in the country, accounting for about eight per cent of Australia’s carbon footprint.

Originally published as ‘It makes no sense … or cents’: Mike Cannon-Brookes set to block AGL demerger after taking huge stake


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