Australian utility and gas firm AGL Energy's plan to split into two companies is facing a challenge from Australian billionaire Mike Cannon-Brookes, who has bought an 11.28pc stake in the company and plans to vote against the demerger at a shareholder meeting next month.
The share purchase through private-sector firm Grok Ventures follows Cannon-Brookes and Canadian investment firm Brookfield Asset Management walking away from a joint takeover bid of A$5.5bn ($3.9bn) for AGL.
AGL requires approval from shareholders holding 75pc of its shares to split into two companies, with Accel Energy to own its thermal power plants and AGL Electricity to be largely an electricity retailer. AGL shareholders are to vote on the demerger by mid-June. The planned demerger will likely fail if Grok buys enough AGL shares or other shareholders holding around 14pc decide to vote against the proposal.
"We believe the board's plan to split AGL into two companies would deliver a terrible outcome for shareholders, customers, Australian taxpayers and the planet," Grok said. The previous joint takeover bid planned to shut all AGL's coal-fired plants by 2030 instead of current plans of 2040-45.
"Decarbonisation is one of Australia's biggest economic opportunities and a vital challenge the world needs to solve," Grok said. "This is why we are now AGL's largest shareholder. We're calling on fellow shareholders to vote against the demerger."
Grok bought the AGL shares on 2 May after AGL said that the outage of its 2,210MW Loy Yang A brown coal-fired power station in Victoria last month will affect group profit by A$73mn.
AGL separately said it has an agreement with US investment firm Global Infrastructure Partners (GIP) to set up a A$2bn fund Energy Transition Investment Partnership (ETIP) to develop, own and manage initially 2,700MW of renewable energy projects. But this is subject to completion of the demerger. AGL will hold a 51pc stake in ETIP through Accel Energy and the remaining 49pc will be owned by GIP.
