By Stuart Condie

SYDNEY--Billionaire Mike Cannon-Brookes, hoping to force greenhouse-gas emission cuts at Australia's biggest polluter, has bought a stake in the company so he can vote against its current strategy.

Mr. Cannon-Brookes, the co-founder of Nasdaq-listed software company Atlassian Corp. Plc, has become the largest shareholder in AGL Energy Ltd. with an 11.28% stake in the electricity generator.

He has told the company he will vote against plans to put its coal-fired power plants into a separate business that he said will face multiple risks and be unattractive to investors.

"We intend to vote every AGL share we control at the relevant time against the demerger, and we call on fellow AGL shareholders to vote against the demerger to avoid further value destruction," Mr. Cannon-Brookes said Tuesday.

The move represents Mr. Cannon-Brookes's second tilt at shifting policy at AGL, which the Australian government's Clean Energy Regulator says is Australia's largest emitter of greenhouse gasses.

AGL in March rejected a takeover proposal from a Brookfield Asset Management Inc.-led consortium, which included Mr. Cannon-Brookes, that planned to close AGL's aging coal-fired generating assets 10 years ahead of AGL's 2045 target and replace them with clean energy and storage. AGL rejected the proposal as too low.

The following month, a unit at AGL's coal-fired Loy Yang A power station in Victoria state was forced offline by an electrical fault. AGL on Monday cut its earnings guidance for the 2022 fiscal year as a result.

"Sweating old coal plants which are expensive to run--and increasingly break down like we're seeing today with Loy Yang A--is not economical or responsible. It makes no sense, or cents," Mr. Cannon-Brookes said.

UBS analyst Tom Allen said in a note that the profile of Mr. Cannon-Brookes, who is one of Australia's best-known entrepreneurs, increased the risk to AGL that a share register dominated by retail investors could vote against the demerger.

The chief executive of Australian superannuation fund Hesta on Tuesday said the fund wouldn't vote its 0.36% holding in favor of the demerger, unless AGL demonstrated a clear strategy to invest in renewables and storage, and to close its coal-fired power plants earlier than its current 2045 target.

"AGL should also provide investors with some certainty that the demerger will not result in emission-intensive assets being taken off listed markets and their lives extended," Hesta CEO Debby Blakey said.

AGL acknowledged that interests associated with Mike Cannon-Brookes had assembled a stake and that the Australian entrepreneur had advised he would vote against demerger.

It said it would press on with the demerger and said U.S.-based fund Global Infrastructure Partners would take a 49% equity stake in the subsequent generation business's own low-carbon projects.

"The board has considered these developments and continues to believe that AGL's proposed demerger is in the best interests of AGL shareholders," AGL said.

AGL shares closed 3.1% lower at A$8.35.


Write to Stuart Condie at stuart.condie@wsj.com


(END) Dow Jones Newswires

05-03-22 0257ET