A billionaire's playbook to getting what you want

AGL - which first started powering street lamps in Sydney in 1841 - is effectively up for sale.

AGL - which first started powering street lamps in Sydney in 1841 - is effectively up for sale.

Tech mogul Mike Cannon-Brookes has claimed victory after dismantling Australia's biggest energy supplier - and doing so rather politely.

In March, Cannon-Brookes set out to buy AGL Energy, which supplies 20% of the nation's electricity. It's coal and gas-fired power stations account for about 8% of the nation's greenhouse gas emissions.

Mike Cannon-Brookes. Credit: Zan Wimberley

The Atlassian co-founder said he wanted to decarbonise the business much faster than 2045 - when AGL said they would remove coal from the company's electricity mix.

On Monday, the Chief Executive, Chairman and two other high-profile directors resigned from the board, as AGL Energy abandoned Cannon-Brooke's long-opposed plan to separate the coal and gas-fired power stations from the rest of the business. They cited a lack of shareholder support for the plan.

CEO of AGL Graeme Hunt. Picture: Aaron Francis/The Australian

Cannon-Brookes is the largest shareholder, owning 11.3% of the company.

"A huge day for Australia," Cannon-Brookes triumphantly Tweeted on Monday morning as he walked along a tree-laden gravel track, claiming a "greener path ahead 🌱".

Wow. A huge day for Australia 💚💛

Had to sit down & take it in. This live shot couldn’t be a better metaphor for a better, greener path ahead 🌱

We embrace the opportunities of decarbonisation with Aussie courage, tenacity & creativity.

Lots of work but we CAN do this 👊🏻 pic.twitter.com/mSCQl554C0

— Mike Cannon-Brookes 👨🏼‍💻🧢🇦🇺 (@mcannonbrookes) May 29, 2022

So, AGL Energy is effectively up for sale.

It appears Cannon-Brookes got what he wanted all along and forced the company to act. 

Let's turn our eyes to the playbook. 

"How to get what you want": A billionaire's playbook

1. Join forces with Canadian Investment Firm Brookfield and put in a $8 billion bid to buy the nation's biggest energy supplier AGL. You want to move the business away from coal and towards renewables, faster.
2. Get rejected by the AGL board
3. Offer them more money ($9 billion)
4. Get rejected by the AGL board
5. Buy a bunch of AGL shares through your private investment group Grok Ventures and announce yourself as the biggest shareholder of the company. You now have an 11.28% stake. You're on your way.
6. Publicly reject a proposed demerger by AGL to separate the coal and gas-fired power station from the rest of the business in the months before it is voted on at a board meeting on June 15. Argue that the demerger is a way for the company to sidestep emission reduction and climate change responsibilities.
7. Urge other shareholders to reject the demerger. 
8. Mount enough pressure that AGL abandons its plans on the demerger due to a lack of shareholder support. Chief Executive Graeme Hunt and Chairman Peter Botten, as well as two other board members, announce their resignation. (Mind you, there's only eight people on the board.)
9. Company is effectively up for sale and will consider approaches from third parties (*wink, wink*)

So, what now?

AGL is potentially up for sale and they will consider approaches from third parties.

Many are speculating whether Cannon-Brookes will buddy up with Brookfield once again in an attempt to buy the company. 

Cannon-Brookes wants AGL to phase out coal by 2035 and offer green loans to customers so they can switch to being 100% renewable households. 

Botten, in a statement on Monday, said the board still believed the demerger proposal was "the best way forward" but Cannon-Brookes long-argued it was not financially viable and would fail to reduce emissions. 

While AGL may be up for sale, experts say it's a tricky time to buy an energy business.

"Electricity markets are close to imploding, with FY23 (Financial Year 2023) futures at more than A$240 megawatts per hour in NSW," MST Marquee analyst Mark Samter told The Australian.