AGL Energy seeks meeting with Mike Cannon-Brookes and Grok Ventures
AGL directors have offered to meet with Mike Cannon-Brookes as shareholders seek clarity on the billionaire’s blueprint for the troubled electricity operator.
AGL Energy’s directors have offered to meet with Mike Cannon-Brookes as the power giant begins the painful task of formulating a new strategy while shareholders will meet with the billionaire to assess his blueprint for the troubled electricity operator.
Two AGL board directors, Vanessa Sullivan and Graham Cockroft, are overseeing a hastily announced strategic review, with the company reaching out to the Atlassian co-founder after he successfully defeated its demerger following a high-profile campaign.
Mr Cannon-Brookes and his family investment office Grok Ventures has laid out a vision for reinventing AGL if he successfully defeats a company demerger, switching off coal by 2035 and offering households green loans to become 100 per cent renewable, which at the time sparked a savage backlash from the company.
UBS said in addition to wanting a stronger decarbonisation pathway, Grok sees considerable value in AGL’s underlying business as a platform to develop a new distributed energy resource product that orchestrates solar and batteries and seamlessly interacts back into the power grid.
“While we do not believe a scale product exists yet in Australia, the right tech could fundamentally change the future of energy generation and retailing,” UBS analysts say after meeting with Grok Ventures, now AGL‘s biggest shareholder.
Grok is an investor in Brighte, the green energy financier that plans to become a stand-alone electricity retailer to provide solar and batteries to Australian households and cut emissions across the power grid. Sources said Grok could look at a Brighte-type offering for AGL.
Big AGL investors have also set up meetings with Grok, eager to understand its next move and strategy along with its bid for two board seats. Grok previously worked with Brookfield on two takeover bids for AGL, both of which were rejected, but speculation simmers the tech titan may return with a reworked offer.
“I want to know what they’re doing as a shareholder and speak with them direct,” Van Eck’s Jamie Hannah said. “The only worry is there is another takeover offer going on here at a price I’m not happy with.”
A battle to appoint the next CEO is also emerging with Macquarie saying AGL may look to promote internally to fill the role, with Christine Corbett and Markus Brokhof potential candidates to replace Graeme Hunt.
“Christine Corbett and COO Markus Brokhof are good candidates, albeit experience in each other’s business is limited. (The) challenge with an external candidate, for instance from Origin or Alinta, is that notice periods required would delay commencement,” Macquarie analysts said in a note to clients.
The power giant is reeling after dumping half its board including Mr Hunt and chairman Peter Botten following its decision to scrap the demerger.
Ms Corbett, a former Australia Post executive, is AGL’s chief customer officer and was CEO-elect of AGL Australia, the now defunct green power retailer that was to be split out.
Mr Brokhof is AGL’s chief operating officer and was going to be both COO and deputy CEO at Accel Energy, the coal-focused generator as part of the company restructure.
AGL has had three CEOs in the last seven years after a period of stability with Michael Fraser who was in the top job for eight years.
“(Looking) offshore is also a possible option, albeit less likely, reflective of past experience, and a need to have a person tapped into the local stakeholders, especially government,” Macquarie said.
UBS said Grok sees a future opportunity in orchestrating power flows at scale from households through power generated via rooftop solar and stored in home batteries/EVs. “If a new scalable trading platform could be developed, using AI to solve multiples of instantaneous customer load profiles into trading algorithms, it could win the race for orchestration,” it added.
AGL’s industrial customer book and low-cost wholesale generation portfolio could provide an “ideal testing ground” for such a product and its 4.5 million energy and telecoms customers an ”opportunity to apply at scale if successful”.
An AGL shareholder also emerged backing a decision to scrap the demerger and wants the board to show “renewed vigour” developing a strategy consistent with Paris climate goals.
The $150bn Aware Super said AGL was capable of restoring long-term value and meeting green environmental targets.
“Aware Super does not believe these objectives to be mutually exclusive and … we encourage AGL’s leadership to pursue these outcomes with renewed vigour.”
AGL shares rose 4c to $8.76.
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