Own AGL shares? Boss slams Cannon-Brookes’ plan as ‘transition into a nosedive’

Hunt says Cannon-Brookes’ attempt to block AGL’s demerger is “a lot of rhetoric but really no plan”.

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Key points

  • AGL managing director and CEO Graeme Hunt has reportedly slammed Mike Cannon-Brookes' latest attempt to block the company's planned demerger in favour of a faster transition to renewables
  • The energy company's boss said shareholders voting on the demerger in June will be choosing "between a plan and no plan"
  • The AGL share price is recovering from yesterday's 3% tumble, gaining 0.7% at the time of writing

AGL Energy Limited (ASX: AGL) is the talk of the town this week after Australian billionaire Mike Cannon-Brookes swept up 11.28% of the company’s shares in a bid to block its planned demerger.

And now the energy producer and retailer’s managing director and CEO, Graeme Hunt, has stepped into the conversation, slamming Cannon-Brookes’ plot as “a lot of rhetoric but really no plan”, reports The Australian.

At the time of writing, the AGL share price is $8.41, 0.72% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is also up 0.5%.

AGL CEO weighs in on Cannon-Brookes’ stance

Owners of AGL shares were potentially gearing up to flick through the company’s long-anticipated demerger scheme documents later this month.

However, they’re likely now entranced as the company’s management goes head to head with its brand new major shareholder.

Cannon-Brookes claims the company’s split into energy-producing business Accel Energy and energy retailer AGL Australia will cause “further value destruction”.

Indeed, the AGL share price has tumbled nearly 70% over the last five years.

Cannon-Brookes believes the downward spiral is due to the company’s failure to transition away from fossil fuels.

But Hunt argues the billionaire doesn’t have a plan to manage the company’s energy transition beyond blocking its demerger.

“It’s okay for people that have conviction about what they think the future should look like. But our shareholders have got to make a choice between a plan and no plan,” Hunt told The Australian.

It’s really a choice between a plan that the company has worked on for over a year, which included looking at a whole host of various options and not just a single minded approach towards the demerger by a company that’s been in the sector for over 185 years… against someone who has got no plan…

We can do a better transition as two companies than one. And if it isn’t a measured transition, and that glide path is too steep, and someone wants to put the company and the transition into a nosedive, then that’s bad for shareholders, and that’s bad for consumers, and bad for employees and communities and everything else.

Graeme Hunt as quoted by The Australian

What’s next for AGL shareholders?

AGL shareholders can expect to receive more details on the demerger later this month.

They can also look forward to going to the ballots in mid-June.

As The Motley Fool reported yesterday, if Cannon-Brookes votes against the plan, the decision rests on the voting power of 13.72% of AGL’s shares.

If approved, the demerger should be implemented before the end of the financial year.

AGL share price snapshot

The last few years have been rough on the AGL share price. Luckily, 2022 is proving to be brighter.

The company’s stock has gained 31.8% since the start of this year. Though, it’s still 8.2% lower than it was this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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