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AGL share price drops after demerger proposal withdrawn

AGL’s shares are down more than 3% in early trade as investors absorb Mike Cannon-Brookes’s success in derailing the energy company’s plan to split.

The stock fell in early trading on Monday, losing 3.6% or 32 cents, to drop to $8.56. That fall compared with a gain of about 1% in the overall market so far.

AGL’s ditching of the plan to carve the $6bn company (by market value) into a retailing arm, with some 4.5m customers, and a generating arm, comes just four weeks after MCB (as he’s known) launched a raid that netted him an 11.28% stake in one of Australia’s oldest companies.

The Albanese government is yet to comment on AGL pulling the pin, as we noted here earlier. Chris Bowen, who is very likely to be the incoming energy and climate minister, won’t be sworn in until Wednesday and won’t get his full briefings under way until Thursday.

One person to keep an eye on is former AGL chief executive Andy Vesey, who developed a more aggressive decarbonisation plan for the company.

The Turnbull government, though, wasn’t too keen on the timing of the closure of the Liddell coal-fired power plant in the Hunter region of NSW, and spoke out publicly against the plan to shut it in 2022.

In the end, it was Vesey who was shut down, and the Liddell closure date pushed back until April 2023, handily just one month after the NSW state elections. At time of the feds v AGL fight in late 2017, then environment and energy minister (in that order) Josh Frydenberg was reported as intervening in person to get Vesey out.

There might be some irony (or even schadenfreude) if Vesey were to return in some role, with Frydenberg recently turfed out of his previously safe Liberal seat of Kooyong.