© Reuters. FILE PHOTO: The logo of AGL Energy Ltd, Australia’s no.2 power retailer, adorns the building of their head office in Sydney, Australia, February 8, 2017. Picture taken February 8, 2017. REUTERS/David Gray/File Photo
SYDNEY (Reuters) – AGL Energy (OTC:) Ltd could launch a strategic review as early as Monday as doubts grow over the Australian power producer’s plans to split into two companies, the Australian newspaper reported.
AGL was mulling its options on Sunday amid market speculation that breaking the company into retail and generation units may lack the shareholder support to go ahead, the newspaper said.
AGL did not immediately respond to a Reuters request for comment.
One option was to launch a strategic review that could boost the chances of AGL being sold off, the Australian reported, citing unnamed sources.
AGL’s board was to meet on Sunday afternoon to determine next steps, with a decision possible on Monday, the report said.
Shareholders are set to vote on June 15 on AGL’s demerger plan. The split would form AGL Australia, which would be the country’s top energy retailer, and Accel Energy, the country’s top power producer.
Technology billionaire Mike Cannon-Brookes indicated on Friday he would seek two seats on AGL’s board if the plan to split the company failed.
In a letter addressed to AGL Chair Peter Botten, Cannon-Brookes criticised the demerger plan and expressed his intention to appoint two nominees for Grok Ventures – a vehicle he owns – to the AGL board.
Cannon-Brookes, the co-chief executive of software firm Atlassian (NASDAQ:) and a vocal climate activist, gained an 11.3% stake in AGL this month by converting part of his derivatives-based holding in the company. He failed in a takeover attempt with Brookfield Asset Management earlier this year.
Australian pension fund HESTA previously joined the tech billionaire in opposing the demerger, saying it did not see the split supporting decarbonisation targets laid out by the Paris climate agreement.
Accel, if the demerger goes ahead, will inherit AGL’s coal-fired power plants and the mantle of Australia’s largest carbon emitter, according to government data.