The AGL Energy Limited (ASX: AGL) share price could be in the firing line on Monday morning amid the latest developments in the demerger saga.
Reports by The Australian late yesterday afternoon suggested the country's largest energy retailer holds doubt on its prospects of receiving approval in the upcoming demerger vote. The energy giant has since confirmed the news ahead of the opening bell.
The development follows last week's news that Wilson Asset Management boss Geoff Wilson had also grown sceptical of the split.
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Cannon-Brookes has it his way
While the Atlassian Corporation (NASDAQ: TEAM) co-founder Mike Cannon-Brookes was not the only opponent of AGL's intention to cut itself into two, he has certainly been the loudest.
From partnering up with Brookfield in a rejected $8.25 billion takeover bid, to quietly accumulating an 11.28% stake in the energy company — Cannon-Brookes has been unrelenting in challenging the proposal.
Yet, exactly 11 months on from the first mention of the radical AGL restructure, it appears the tech billionaire has prevailed. Shareholders will be watching intently to see how the AGL share price reacts to the news this morning.
According to the latest release, AGL Energy is withdrawing its proposal to break the company into AGL Australia and Accel Energy. Though, the board's decision appears to have been made begrudgingly. The announcement notes that the board still believes the demerger would have been "the best way forward".
However, with the strong opposition from the likes of Cannon-Brookes' Grok Ventures, the board thinks it is unlikely to get over the required 75% approval mark. As such, the energy company is canning the proposal and opting for a strategic review.
AGL share price in focus on board shake-up
ASX-listed AGL will also be seeking a new CEO following the decision for Graeme Hunt to step down from the role. Though, the shake-up of the board doesn't stop there.
In addition, chair Peter Botten, non-exec director Jacqueline Hey, and Diane Smith-Gander will all resign from the board.
It is believed that Mike Cannon-Brookes will seek to gain representation on the AGL board.
The AGL share price is up 44.46% since the beginning of the year.
