Why have AGL shares been getting so much love on Tuesday?

Rumours Cannon-Brookes is behind a nearly $300 million trade today are swirling.

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Key points

  • More than $362 million worth of AGL shares swapped hands today, with nearly $300 million of that rumoured to have been snapped up by Mike Cannon-Brookes
  • The tech mogul is reportedly preparing to vote 'no' to AGL's demerger by swapping derivatives for physical shares with voting rights
  • The billionaire also sent a letter to fellow AGL shareholders on Tuesday outlining his case against the company's plan and urging them to join him in voting against it

Shares in AGL Energy Limited (ASX: AGL) are among the most traded on the market on Tuesday, leading media to point to Mike Cannon-Brookes once more.

A 5% stake in the company – worth just under $300 million – was reportedly traded through JPMorgan on Tuesday.

The Atlassian Corporation (NASDAQ: TEAM) CEO and activist against the company’s demerger might be the face behind it.

The tech billionaire also sent a letter to AGL shareholders earlier today, urging them to vote against the plan.

As of Tuesday’s close, the AGL share price is $8.62, 2.25% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) finished 0.27% higher.

Let’s take a closer look at the latest on Cannon-Brookes’ battle to block AGL’s planned split.

Is Cannon-Brookes behind a major trade of AGL shares?

Cannon-Brookes has stepped up the fight against AGL’s demerger as he reportedly prepares to march into the voting booth.

The Atlassian boss is exchanging AGL derivatives – which helped his investment vehicle, Grok Ventures, pick up an 11.28% stake earlier this month – for physical shares in the company, reports the Australian Financial Review.

It’s reportedly a swap that needs to happen before the tech mogul can vote on the demerger at AGL’s upcoming scheme meeting.

Cannon-Brookes makes no secret of his plan to vote his stake against the split that aims to see AGL Energy become energy retailer, AGL Australian, and energy generator, Accel Energy.

And today he is urging fellow shareholders to do the same on 15 June.

In a letter sent to shareholders, AGL’s new major investor dubbed the demerger “deeply flawed” and “globally irresponsible”:

When a worker lit Sydney’s first gas lamp in 1841, AGL Energy was a company excited to embrace the future – not one that was afraid of it.

Today, after overseeing a share price decline of nearly 70% over 5 years, the AGL Energy board, which owns less than 0.02% of the company, is asking us to vote on whether to split AGL Energy into two companies …

If the demerger is voted down … we intend to work with the board to listen to shareholders and set a more ambitious plan for the company. A plan that attracts capital and customers. A plan that ensures that AGL Energy’s workers and communities are beneficiaries of this economic opportunity. One that delivers dividends and shareholder value.

Mike Cannon-Brookes in a letter to AGL shareholders

Cannon-Brookes claims demerging will cost shareholders approximately $400 million to $500 million.

He also said AGL Energy hasn’t invested a dime in the direct development of renewable energy generation over the last five years.

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Atlassian. 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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