1 00:00:00,200 --> 00:00:02,600 Speaker 1: Good morning and welcome to the Daily Odds. It's the 2 00:00:02,640 --> 00:00:05,280 Speaker 1: first of June. It's winter and if you're on the 3 00:00:05,280 --> 00:00:09,039 Speaker 1: East and seaboard you are definitely feeling that already. On 4 00:00:09,080 --> 00:00:11,960 Speaker 1: today's podcast, we're talking about what happened with Mike Cannon 5 00:00:11,960 --> 00:00:15,319 Speaker 1: Brooks and AGL earlier this week, because there's a fair 6 00:00:15,360 --> 00:00:17,880 Speaker 1: bit of jargon around what it all means, but it 7 00:00:17,960 --> 00:00:20,680 Speaker 1: is pretty monumental and Sam we'll chat through that in 8 00:00:20,720 --> 00:00:24,040 Speaker 1: a bit, but first, there are officially no more seats 9 00:00:24,320 --> 00:00:26,360 Speaker 1: that are contested post election. 10 00:00:28,240 --> 00:00:31,040 Speaker 2: We have wrapped everything up, Zara, and not a moment 11 00:00:31,080 --> 00:00:33,879 Speaker 2: too soon. We're now ten days after the election, so 12 00:00:34,159 --> 00:00:37,000 Speaker 2: it is about time that we know who's won every 13 00:00:37,000 --> 00:00:40,080 Speaker 2: single seat in the House of Reps. Labor is expected 14 00:00:40,120 --> 00:00:43,440 Speaker 2: to reach seventy seven seats after claiming victory in the 15 00:00:43,479 --> 00:00:46,160 Speaker 2: New South Wales seat of Gilmore. That's the one where 16 00:00:46,200 --> 00:00:50,479 Speaker 2: the Liberal opponent was former New South Wales Minister Andrew Constance. 17 00:00:50,960 --> 00:00:53,479 Speaker 2: Incumbent and p Fiona Phillips said, we have seen this 18 00:00:53,560 --> 00:00:57,440 Speaker 2: strong trend towards me again with the absentee vote, which 19 00:00:57,480 --> 00:01:00,640 Speaker 2: is very unlikely and I am just thrilled with the result. 20 00:01:00,640 --> 00:01:03,080 Speaker 1: And also just adding to that the ABC also has 21 00:01:03,160 --> 00:01:06,280 Speaker 1: called deacon for the Liberals, so that doesn't change how 22 00:01:06,280 --> 00:01:10,640 Speaker 1: many seats Labor will have in this parliament. Moving now 23 00:01:10,720 --> 00:01:13,920 Speaker 1: to a story that was significant during the campaign. The 24 00:01:13,959 --> 00:01:17,600 Speaker 1: CEO of Guide Dogs of Victoria. Her name was Karen Hayes. 25 00:01:17,959 --> 00:01:21,360 Speaker 1: She has formally resigned from the charity after an investigation 26 00:01:21,520 --> 00:01:25,520 Speaker 1: was launched into her appearance on election pamphlets endorsing Josh 27 00:01:25,600 --> 00:01:27,160 Speaker 1: Freedenberg during the campaign. 28 00:01:28,480 --> 00:01:31,480 Speaker 2: Over to Europe now, and European Union leaders have agreed 29 00:01:31,480 --> 00:01:34,399 Speaker 2: to ban the export of Russian oil to the EU. 30 00:01:35,000 --> 00:01:38,360 Speaker 2: According to the EU Council President Charles Michael, the sanctions 31 00:01:38,400 --> 00:01:42,479 Speaker 2: will immediately impact about seventy five percent of Russian oil imports. 32 00:01:43,000 --> 00:01:45,040 Speaker 2: It's expected by the end of this year that ninety 33 00:01:45,080 --> 00:01:48,600 Speaker 2: percent of the Russian oil imported into Europe will be banned. 34 00:01:50,160 --> 00:01:53,680 Speaker 1: And for today's good news, the Canadian government has introduced 35 00:01:53,800 --> 00:01:58,040 Speaker 1: legislation which would freeze ownership of handguns, banning all buying 36 00:01:58,160 --> 00:02:00,960 Speaker 1: and selling. Prime Minister just And Trudeau said it was 37 00:02:01,000 --> 00:02:04,440 Speaker 1: the government's duty to act in response to rising gun violence. 38 00:02:10,200 --> 00:02:12,639 Speaker 2: So we know that billionaires like to buy companies. We've 39 00:02:12,680 --> 00:02:15,160 Speaker 2: seen it play out in the US with Elon Musk 40 00:02:15,240 --> 00:02:17,919 Speaker 2: and Twitter, and we kind of have our own version 41 00:02:18,040 --> 00:02:20,760 Speaker 2: here at home, except I would dare say there's a 42 00:02:20,760 --> 00:02:23,240 Speaker 2: little more stability in the billionaire that we're going to 43 00:02:23,240 --> 00:02:27,320 Speaker 2: be talking about today than mister Musk. In America, we're 44 00:02:27,360 --> 00:02:29,880 Speaker 2: going to be talking today about Mike kinn of Brooks 45 00:02:30,280 --> 00:02:33,960 Speaker 2: and his attempted purchase of AGL. Now, whilst it doesn't 46 00:02:34,000 --> 00:02:36,520 Speaker 2: look like the AGL purchase is going to happen, there 47 00:02:36,560 --> 00:02:39,919 Speaker 2: are some really interesting movements of foot but I think 48 00:02:39,919 --> 00:02:43,040 Speaker 2: we should start right at the very beginning. Zara explain 49 00:02:43,080 --> 00:02:44,760 Speaker 2: to us what AGL is. 50 00:02:45,240 --> 00:02:49,119 Speaker 1: Okay, So, AGL is an Australian energy company and it's 51 00:02:49,160 --> 00:02:53,240 Speaker 1: actually Australia's biggest polluter, and that's because it gets a 52 00:02:53,280 --> 00:02:56,600 Speaker 1: lot of its energy from coal fired power plans. And 53 00:02:56,639 --> 00:02:59,400 Speaker 1: when I say the biggest polluter, it's pretty big. It 54 00:02:59,520 --> 00:03:02,400 Speaker 1: emits about as much as the entire country of New 55 00:03:02,520 --> 00:03:06,880 Speaker 1: Zealand or Ireland or Switzerland just on its own. This 56 00:03:06,960 --> 00:03:10,200 Speaker 1: is no secret. And AGL has recognized that it will 57 00:03:10,280 --> 00:03:12,959 Speaker 1: have to transfer out of coal and it has had 58 00:03:13,040 --> 00:03:16,040 Speaker 1: a plan to do that by twenty forty five, the 59 00:03:16,120 --> 00:03:18,120 Speaker 1: detail of which we'll get into in a moment. Because 60 00:03:18,200 --> 00:03:21,400 Speaker 1: those plans have been derailed by Mike cannon Brooks. 61 00:03:21,520 --> 00:03:24,079 Speaker 2: So this is our main character now for this story. 62 00:03:24,120 --> 00:03:25,360 Speaker 2: Mike cannon Brooks. Who is he? 63 00:03:25,760 --> 00:03:28,839 Speaker 1: Mike cannon Brooks is the co chief executive and co 64 00:03:28,919 --> 00:03:32,200 Speaker 1: founder of at Lassian and at Lasian is a developer 65 00:03:32,240 --> 00:03:35,560 Speaker 1: of enterprise software. Don't ask me to explain much more 66 00:03:35,560 --> 00:03:39,080 Speaker 1: than that. He is well and truly a billionaire. According 67 00:03:39,080 --> 00:03:43,200 Speaker 1: to the Financial Review, Mike cannon Brooks's estimated netwellth sits 68 00:03:43,240 --> 00:03:46,600 Speaker 1: around that twenty seven point eight billion dollar mark, so 69 00:03:47,160 --> 00:03:49,840 Speaker 1: it puts him behind just two people in this country, 70 00:03:49,960 --> 00:03:52,040 Speaker 1: Gina Ryan Hart and Andrew Forrest. 71 00:03:52,560 --> 00:03:54,880 Speaker 2: So between Mike cannon Brooks and myself, we've got about 72 00:03:54,880 --> 00:03:57,960 Speaker 2: twenty seven point eight billion dollars of net wealth, but 73 00:03:58,080 --> 00:04:01,080 Speaker 2: only one of us have something to do with AGL. 74 00:04:01,400 --> 00:04:03,920 Speaker 2: What does he have to do with this energy company? 75 00:04:04,120 --> 00:04:06,920 Speaker 1: Well, earlier this year he tried to buy it. He 76 00:04:07,000 --> 00:04:11,440 Speaker 1: partnered with a Canadian investment company called Brookfield and offered 77 00:04:11,560 --> 00:04:14,760 Speaker 1: a significant sum of money to acquire AGL and to 78 00:04:14,880 --> 00:04:17,760 Speaker 1: take it private, which means basically take it off the 79 00:04:17,800 --> 00:04:21,040 Speaker 1: share market, and in doing so, he wanted to close 80 00:04:21,120 --> 00:04:24,719 Speaker 1: down its coal plans a mere fifteen years earlier that 81 00:04:24,800 --> 00:04:28,160 Speaker 1: it was planning to basically turning it instead into a 82 00:04:28,240 --> 00:04:31,560 Speaker 1: renewable energy company. So that would mean moving it from 83 00:04:31,600 --> 00:04:34,599 Speaker 1: being the country's biggest emitter into as I just said, 84 00:04:34,680 --> 00:04:39,039 Speaker 1: a renewable energy company. Needless to say, nothing really changed there. 85 00:04:39,080 --> 00:04:42,840 Speaker 1: He wasn't successful. The board of AGL rebuffed his offers 86 00:04:42,880 --> 00:04:46,080 Speaker 1: not once but twice, but he didn't give up them. 87 00:04:46,160 --> 00:04:50,239 Speaker 1: He decided to buy up a significant portion of its shares. 88 00:04:50,400 --> 00:04:52,960 Speaker 1: So there are a number of shares that you can 89 00:04:53,080 --> 00:04:56,799 Speaker 1: buy in the company of AGL and his investment firm, 90 00:04:57,160 --> 00:04:59,839 Speaker 1: Grock Ventures, which he co owns with his wife, and 91 00:05:00,600 --> 00:05:04,120 Speaker 1: they bought up more than eleven percent of AGL shares 92 00:05:04,279 --> 00:05:07,760 Speaker 1: and that meant, based on the structure of the shares, 93 00:05:08,120 --> 00:05:12,479 Speaker 1: that it made him agl's biggest shareholder. So crucially, here, 94 00:05:12,839 --> 00:05:16,599 Speaker 1: shareholders get a vote on major company decisions. So Mike 95 00:05:16,640 --> 00:05:20,120 Speaker 1: cannon Brooks effectively brought up eleven percent of the votes. 96 00:05:20,240 --> 00:05:22,839 Speaker 1: And even though that wouldn't let him implement his full 97 00:05:22,920 --> 00:05:25,080 Speaker 1: vision for AGL and you know, move it into this 98 00:05:25,160 --> 00:05:29,640 Speaker 1: renewable space, it did allow him to campaign against agl's 99 00:05:29,680 --> 00:05:32,279 Speaker 1: current coal plan, which is a coal plan. The AGL 100 00:05:32,360 --> 00:05:36,520 Speaker 1: board has now dropped because his opposition, and remember he 101 00:05:36,600 --> 00:05:40,479 Speaker 1: holds eleven percent, meant it wouldn't get enough shareholder support 102 00:05:40,560 --> 00:05:42,640 Speaker 1: to pass, and so it's now been blocked. 103 00:05:42,800 --> 00:05:44,760 Speaker 2: The thing I see in my mind when you're talking 104 00:05:44,760 --> 00:05:46,479 Speaker 2: about all that z are is like someone trying to 105 00:05:46,480 --> 00:05:48,839 Speaker 2: get through a doorway and you can't get through the doorway. 106 00:05:49,160 --> 00:05:51,640 Speaker 2: So he just gets eleven percent of himself through the door, 107 00:05:51,720 --> 00:05:55,400 Speaker 2: and that means the door can't fully close. What was 108 00:05:55,560 --> 00:05:56,360 Speaker 2: Agl's plan? 109 00:05:56,720 --> 00:06:00,480 Speaker 1: Okay, So Agl's plan was basically called the Demas merger 110 00:06:00,560 --> 00:06:03,120 Speaker 1: and it was a plan to transition out of coal 111 00:06:03,279 --> 00:06:07,520 Speaker 1: by splitting the company into two. Essentially, many of the 112 00:06:07,560 --> 00:06:11,360 Speaker 1: coal assets would go into one of these companies. Now, 113 00:06:11,400 --> 00:06:15,159 Speaker 1: Mike cannon Brooks was repeatedly and very vocally critical of this. 114 00:06:15,400 --> 00:06:17,360 Speaker 1: He said that it was too slow of a plan 115 00:06:17,440 --> 00:06:20,320 Speaker 1: to get out of coal, and he wanted AGL to 116 00:06:20,400 --> 00:06:25,000 Speaker 1: be more proactive in moving past coal and embracing renewables instead. 117 00:06:25,600 --> 00:06:28,880 Speaker 1: He said that this decarbonization project, or the vision that 118 00:06:28,920 --> 00:06:31,280 Speaker 1: he had of AGL, could make it a lot more 119 00:06:31,320 --> 00:06:34,599 Speaker 1: money than the de merger, which was Agl's plan. So 120 00:06:34,800 --> 00:06:38,280 Speaker 1: as a shareholder and businessman, he wasn't just talking about 121 00:06:38,320 --> 00:06:40,680 Speaker 1: getting out of coal because it's quote the right thing 122 00:06:40,720 --> 00:06:44,000 Speaker 1: to do, But rather his argument rested upon the idea 123 00:06:44,040 --> 00:06:46,520 Speaker 1: that he thought it would make the company more money, 124 00:06:46,520 --> 00:06:49,240 Speaker 1: and as a shareholder, it is in his interests for 125 00:06:49,279 --> 00:06:51,240 Speaker 1: the company to again make more money. 126 00:06:51,440 --> 00:06:53,799 Speaker 2: And so the reason we're talking about Mike cannon Brooks 127 00:06:53,839 --> 00:06:56,120 Speaker 2: and AGL this week is that the board has now 128 00:06:56,240 --> 00:06:59,800 Speaker 2: withdrawn that plan. How can that all just be down 129 00:06:59,839 --> 00:07:02,880 Speaker 2: to the fact that one shareholder with eleven percent of 130 00:07:02,880 --> 00:07:06,360 Speaker 2: the shares objects, Wouldn't that mean that eighty nine percent 131 00:07:06,400 --> 00:07:08,159 Speaker 2: of the shareholders voted the other way. 132 00:07:08,240 --> 00:07:10,640 Speaker 1: Look, I've had a steep learning curve of learning all 133 00:07:10,800 --> 00:07:13,880 Speaker 1: about how this all works because it's been in the 134 00:07:13,920 --> 00:07:17,360 Speaker 1: news a lot. But the de merger plan needed to 135 00:07:17,360 --> 00:07:21,280 Speaker 1: be approved by seventy five percent of shareholders. So if 136 00:07:21,320 --> 00:07:24,400 Speaker 1: every shareholder turned up to vote, that would mean Mike 137 00:07:24,440 --> 00:07:27,560 Speaker 1: cannon Brooks would need to win over another fourteen percent 138 00:07:27,880 --> 00:07:31,040 Speaker 1: to sink the proposal. But if not all the shareholders 139 00:07:31,080 --> 00:07:33,920 Speaker 1: exercise their vote, it might be even less than that. 140 00:07:34,480 --> 00:07:36,600 Speaker 1: Now we'll never know for sure whether he was going 141 00:07:36,640 --> 00:07:38,960 Speaker 1: to get there, because the boards now said it's pulling 142 00:07:39,000 --> 00:07:41,760 Speaker 1: the proposal and won't even let it go to a vote. 143 00:07:42,040 --> 00:07:45,000 Speaker 1: They've said that's because of the opposition of Grock Ventures, 144 00:07:45,040 --> 00:07:49,000 Speaker 1: and again that's Mike cannon Brooks, the opposition of some others, 145 00:07:49,120 --> 00:07:53,000 Speaker 1: and concern about how many shareholders would turn out to vote. 146 00:07:53,200 --> 00:07:55,600 Speaker 2: So if we take stock here, we've got a pretty 147 00:07:55,640 --> 00:07:59,680 Speaker 2: significant loss for the AGL board. They've had this proposal 148 00:07:59,680 --> 00:08:01,840 Speaker 2: that's to talking about for a long time to de 149 00:08:02,040 --> 00:08:05,400 Speaker 2: merge the company and it's now gone down the toilet, 150 00:08:05,480 --> 00:08:08,080 Speaker 2: and their belief in the benefits of the de merger 151 00:08:08,760 --> 00:08:11,360 Speaker 2: was actually part of the reason for them turning down 152 00:08:11,560 --> 00:08:15,640 Speaker 2: canon Brooks's original acquisition offer. What's the fallout going to 153 00:08:15,640 --> 00:08:16,760 Speaker 2: be now for the board? 154 00:08:17,040 --> 00:08:19,680 Speaker 1: Well, you're right, Sam, it's a massive loss for the 155 00:08:19,720 --> 00:08:22,760 Speaker 1: board and a massive win for Mike cannon Brooks, who 156 00:08:22,800 --> 00:08:24,800 Speaker 1: tweeted this week that it was a huge day for 157 00:08:24,880 --> 00:08:29,280 Speaker 1: Australia and an exciting result. The fallout is basically that 158 00:08:29,400 --> 00:08:32,040 Speaker 1: a lot of the current senior leadership of AGL are 159 00:08:32,080 --> 00:08:34,000 Speaker 1: going to lose their jobs over this, and it's really 160 00:08:34,040 --> 00:08:37,280 Speaker 1: as simple as that. In the very same media release 161 00:08:37,280 --> 00:08:40,320 Speaker 1: where AGL announced it was shelving this de merger plan, 162 00:08:40,840 --> 00:08:43,600 Speaker 1: it also announced that the chair of the board, the CEO, 163 00:08:43,679 --> 00:08:47,400 Speaker 1: and managing director and two other board directors were all 164 00:08:47,440 --> 00:08:51,720 Speaker 1: going to resign. That is a pretty significant wipeout at 165 00:08:51,800 --> 00:08:54,800 Speaker 1: the highest level. Now it remains to be seen who 166 00:08:54,920 --> 00:08:57,000 Speaker 1: is going to replace them and what the plan will 167 00:08:57,040 --> 00:08:59,960 Speaker 1: be for the future of AGL. But given the significant 168 00:09:00,160 --> 00:09:02,560 Speaker 1: role that Mike cannon Brooks has played in this, and 169 00:09:02,640 --> 00:09:05,360 Speaker 1: remember that's not just him saying that, that's now the 170 00:09:05,400 --> 00:09:09,160 Speaker 1: board also acknowledging that he was influential, it's quite possible 171 00:09:09,200 --> 00:09:12,120 Speaker 1: that as their largest shareholder, he'll want some of these 172 00:09:12,280 --> 00:09:14,840 Speaker 1: new appointments to be people who share his vision and 173 00:09:14,960 --> 00:09:18,960 Speaker 1: his view for AGL. So while Mike cannon Brooks failed 174 00:09:19,040 --> 00:09:21,840 Speaker 1: in his acquisition bit earlier this year, he said he 175 00:09:21,880 --> 00:09:24,920 Speaker 1: was really disappointed, it seemed like he'd lost, he has 176 00:09:25,000 --> 00:09:28,320 Speaker 1: continued to despite all of this, seem pretty determined to 177 00:09:28,360 --> 00:09:30,920 Speaker 1: make it work. And he's come back at AGL a 178 00:09:31,000 --> 00:09:33,319 Speaker 1: different way, and it's looking like he's too big and 179 00:09:33,440 --> 00:09:34,920 Speaker 1: too determined to ignore. 180 00:09:34,800 --> 00:09:38,040 Speaker 2: Some pretty monumental moves that will all feel as part 181 00:09:38,080 --> 00:09:43,200 Speaker 2: of Australia's both economy and energy grid. It now remains 182 00:09:43,240 --> 00:09:45,760 Speaker 2: to be seen what the future of AGL will look like. 183 00:09:45,880 --> 00:09:47,960 Speaker 2: What we do know is that Mike Cannon Brooks will 184 00:09:47,960 --> 00:09:50,560 Speaker 2: play a role in it as a shareholder. That's all 185 00:09:50,559 --> 00:09:53,160 Speaker 2: we've got time for today on the Daily Ods. If 186 00:09:53,200 --> 00:09:55,880 Speaker 2: you liked what you heard, we'd love a review or 187 00:09:55,920 --> 00:09:59,360 Speaker 2: a rating on Spotify. Until then, we will speak to 188 00:09:59,360 --> 00:10:00,240 Speaker 2: you tomorrow mon morning.