/ 22 February 2022

Cannon-Brookes to go after AGL

Mike Cannon-Brookes
Image source: AAP

THE SQUIZ
Atlassian co-founder/rich-lister Mike Cannon-Brookes has his sights firmly set on buying energy company AGL, despite it knocking back his $8 billion takeover bid yesterday. AGL said the offer undervalued the company and wasn’t in the best interests of shareholders. However, Cannon-Brookes – who has partnered with Canadian asset manager Brookfield – isn’t taking no for an answer. “It’s obviously disappointing,” he said yesterday, but “we have been trying to work with the board through the weekend and will continue to move forward.” The bid certainly excited investors yesterday sending AGL’s share price up 10.6%.

WHY AGL?
That’s a relatively simple one to answer. AGL is one of Australia’s biggest emitters of greenhouse gas emissions, and Cannon-Brookes says he’s serious about using his wealth to solve big problems and shape a better future. He and his wife Annie have already committed $1.5 billion of their (immense) fortune to climate change philanthropy. And with AGL, he believes there’s an opportunity to remove coal-fired power plants from its roster of energy-generating assets in 2030, a long time before the planned exit in 2045. That endeavour and turning AGL into a clean energy giant would see Cannon-Brookes and Brookfield spend an additional $20 billion. Yesterday, he said it would be “the single biggest decarbonisation project” in the world and “a great economic opportunity facing Australia, but it requires vision and action”. But it’s a pipedream until shareholders agree to sell to him and Brookfield.

WHAT WOULD ALL THIS MEAN FOR POWER PRICES?
PM Scott Morrison says the early shutdowns of coal-generated power plants will force prices up, adding his government could step in to stop the trend. That’s reference also covers a request from Origin Energy last week to close the country’s biggest coal-fuelled power station 7 years earlier than planned. “Our government is very committed to ensure we sweat those assets for their life,” he said. But here’s the rub: Cannon-Brookes said renewable sources will generate cheaper power saying his plan involved “bringing significant supply” and that “should bring prices down in the long term.”   

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