AGL Energy Limited (AGL Energy) has officially withdrawn its proposal to separate AGL Energy into AGL Australia and Accel Energy via a demerger.
“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. However, the Board believes this path is no longer available,” the company said in a statement.
“AGL Energy believes that the Demerger Proposal would have been supported by a majority of shareholders, both retail and institutional, many of whom are long term holders of AGL Energy shares.
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“However, having regard to anticipated voter turnout and stated opposition from a small number of investors including Grok Ventures, AGL Energy believes the Demerger Proposal will not receive sufficient support to meet the 75 per cent approval threshold for a scheme of arrangement.
“In these circumstances, the AGL Energy Board considers that it is in the best interests of AGL Energy shareholders to withdraw the Demerger Proposal. AGL Energy will approach the Court for orders to cancel the Court ordered scheme meeting and will not proceed with the associated general meeting that was to have considered various related resolutions.”
Following the withdrawal of the Demerger Proposal, the AGL Energy Board will review AGL Energy’s strategic direction, including:
- giving consideration to how the company moves forward in a way that will create long-term shareholder value in an environment where pressure on decarbonisation and energy affordability is accelerating;
- utilising the extensive analytical work conducted in preparation for the Demerger Proposal and a thorough assessment of the strategic plans that were developed for AGL Australia and Accel Energy, and their respective roles in the energy transition;
- any new approaches from third parties regarding alternative transactions; and
- further consultation with a broad range of stakeholders including Grok Ventures and other shareholders, regulators, governments and communities.
The review of the company’s strategic direction will be overseen by a Board sub-committee co-chaired by Vanessa Sullivan and Graham Cockroft utilising internal and external resources.
AGL said its board was committed to working actively with all stakeholders, “including government to decarbonise AGL Energy’s business at the fastest rate possible, while ensuring energy system stability, energy affordability for retail and industrial customers, and appropriate shareholder value outcomes”.
AGL Energy will report back to shareholders and investors in September and provide an update on the progress of the review of AGL Energy’s strategic direction at the time of its FY22 results announcement.
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The AGL Energy Board has also determined that Board and Management renewal must occur, with the following changes afoot:
- Chairman Peter Botten will resign from the Board upon appointment of a replacement independent Chairperson.
- the Board and Graeme Hunt have agreed that Hunt will step down as CEO and managing director. Hunt will continue to act in this role until a new CEO and managing director is appointed. The Board will immediately undertake a search process to complete this appointment as soon as possible.
- Jacqueline Hey has resigned as a non-executive director effective 30 May 2022.
- Diane Smith-Gander will resign from the Board following the release of AGL’s FY22 full-year results in August.
The Board will immediately commence a search process to identify potential new Non-Executive Directors of AGL Energy. This will include discussions with all relevant stakeholders.
