Key Points
- Company is abandoning plans to split into two separate entities after opposition from billionaire Mike Cannon-Brookes
- AGL had proposed splitting the company into an energy retailer and a coal-fired electricity generatory
AGL Energy has ditched plans to split the company into two following strong opposition from billionaire Mike Cannon-Brookes, 17 days before shareholders were due to vote on the proposal.
"The board of AGL Energy continues to believe that the demerger proposal offers the best way forward for AGL Energy and its shareholders, and this was also the view of the independent expert," the company said in a statement on Monday.
"However, the board believes this path is no longer available."
AGL had proposed splitting the company into an energy retailer, called AGL Australia, and a coal-fired electricity generator, called Accel Energy.
The new entities were to have targets to reduce emissions to net zero by 2040 and 2047, respectively.
AGL's biggest shareholder, Mr Cannon-Brookes' Grok Ventures, was staunchly opposed to the split.
Shareholders were due to vote on the demerger on 15 June.
AGL said it believed a majority of retail and institutional investors would have supported the demerger.
But this was not going to be enough to meet the 75 per cent approval threshold to allow the demerger to proceed.
The dumping of the demerger means a number of AGL board and management heads will roll.
They include Chairman Peter Botton, CEO Graeme Hunt and two directors, who will all be replaced.
"Board and management renewal must occur through an orderly, expedited transition period with appropriate external advice," AGL said.
"The board will immediately commence a search process to identify potential new non-executive directors ... This will include discussions with all relevant stakeholders."
AGL's board will now "review" the company's strategic direction while consulting with Grok Ventures and other key shareholders and stakeholders, including government and regulators.
It expects to report back to shareholders in September.
