AGL Energy is expected to face an uphill battle to create value for shareholders through a split of its huge electricity and gas business, but some in the market argue it has little choice as conflicting pressures build in power generation and electricity retailing.

Analysts have cautiously endorsed the rationale behind management’s move towards dividing up the assets of the country’s oldest power and gas supplier. Less certain is whether shareholders, who have already seen the value of their stock slump 55 per cent in the past two years, can expect much benefit from it.