By any means necessary: how Cannon-Brookes plans to control AGL

While his original attempt to buy the company was rebuffed, Cannon-Brookes has engineered a handy workaround – dilute AGL’s incumbent board to either render it impotent or persuade it to get with his program.

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The tech billionaire and his team vetted 100 potential candidates to put on AGL’s board. Independent? Probably. Like-minded? Definitely.

Cannon-Brookes was clearly energised when, with only 11 per cent of the company, he found sufficient shareholder support to demolish AGL’s plans to break up the company via a demerger.

Cannon-Brookes’ investment arm, Grok, needed to muster only 25 per cent of shareholders to vote against AGL’s planned demerger. It had the numbers to satisfy an even higher 50 per cent hurdle, and will now need to replicate the feat to get the nominated directors across the line.

The early betting is on Cannon-Brookes to get his way at the AGM, even though the challenge is numerically more difficult. The three major proxy firms, which advise large institutional shareholders, are supporting three or four of his nominated candidates.

Additionally, Grok has engaged Orient Capital to poll retail shareholders, and to date two out of three respondents also support adding new blood to AGL’s board.

AGL’s management is supporting only one of Grok’s nominees, former Tesla Energy director Mark Twidell, having argued initially that they were not independent. That position has more recently morphed – it now argues their particular skill sets are already covered off by the incumbent directors.

Cannon-Brookes isn’t buying either of the arguments. And the hostility directed by him towards AGL’s board, on the issue of independence, is acute enough to question whether a truce between the two is truly possible.

“I don’t know if they are scared, all I know is [that] their argument is bullshit,” Cannon-Brookes said during the interview.

“They [directors nominated by Grok] meet every single legal definition of being independent … there is no connection, no contract, no legal agreement with any of them. Some of them I haven’t even spoken to. ”

While he has already scuttled AGL’s demerger and forced the board into a strategic U-turn, which involves bringing forward the closures of AGL’s coal-fired generators, the billionaire agitator isn’t satisfied that AGL has come far enough.

He says the plans outlined by the current board are not yet aligned with Paris Agreement climate targets- a hurdle that needs to be crossed if AGL is to attract the capital it needs to completely transition to renewables.

That said, early proxy votes received by AGL indicate that the Climate Action Transition Plan, to be put before shareholders at the upcoming general meeting, will be approved, as will the executive pay report.

Cannon-Brookes says Grok will be voting against both.

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