The AGL Energy Limited (ASX: AGL) share price has bounced back from a rough start on Monday. Its struggle comes amid more reports of activist organisations slamming the company’s planned demerger.
At the time of writing, the AGL share price is $8.42, 0.24% higher than its previous close.
Though, it spent much of this morning in the red, trading for as low as $8.36 – a 0.4% slip.
Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is recording a 0.22% gain on Monday.
Let’s take a closer look at the latest criticism aimed at the split that will see AGL’s energy retail business become AGL Australia and its generation business transform into Accel Energy.
AGL demerger faces more heat
The AGL share price has rebounded after a disappointing morning’s trade. Its recovery came amid reports that London-based activist investment firm Snowcap has once again voiced its disapproval of the company’s demerger.
If this all sounds a bit familiar, it’s likely because Snowcap released a dossier detailing its disapproval of the demerger in February. Then, it said the split was “value destructive and environmentally disastrous”.
It also said the AGL share price could have an upside of 30% to 60% if the company ditched its demerger and transitioned away from coal-fired power by 2030. And that view reportedly hasn’t changed.
We were extremely underwhelmed – 356 pages and still not one good reason why AGL should split in two.
It’s increasingly apparent to us that the demerger exclusively serves the interests of AGL’s leadership and advisers, leaving shareholders to pick up the $260 million bill.
The activist firm also welcomed the 11.28% stake in AGL recently picked up by Mike Cannon-Brookes’ Grok Ventures.
It reportedly said it was “encouraged” to see a fellow shareholder both disapprove of the demerger and envisage a greener future for the company.
Similar sentiments have also come from the Australasian Centre for Corporate Responsibility (ACCR) and Greenpeace.
The former pointed to a 2021 shareholder vote wherein 54% of AGL investors urged the company to establish Paris Agreement-aligned emissions targets.
ACCR director of climate and environment Dan Gocher said AGL’s plan to demerge “ignores the majority of its shareholders”.
AGL share price snapshot
Despite plenty of controversy, the AGL share price has been performing well in 2022.
It has gained 33% since the start of the year, outperforming the ASX 200 by around 40%.
However, the company’s stock and the index are both approximately equal with where they were 12 months ago.