Why is the AGL share price taking a battering on Friday?

The AGL Energy Limited (ASX: AGL) share price is underperforming this afternoon. Its suffering comes amid news the company is going head-to-head with Atlassian Corporation (NASDAQ: TEAM) billionaire Mike Cannon-Brookes at its annual general meeting (AGM).

The AGL board has declared it will only support one of four candidates Cannon-Brookes’ Galipea Partnership nominated.

Galipea holds an 11.28% stake in the company, acquired as part of Cannon-Brookes’ successful campaign to scrap AGL’s planned demerger.

The AGL share price is sliding today amid the company’s release. It’s down 2.6% right now, trading at $7.13.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is also in the red, having slumped 0.59%. Finally, the company’s home sector – the S&P/ASX 200 Utilities Index (ASX: XUJ) – is falling 0.01%.

Let’s take a closer look at the latest apparent disagreement between AGL and its major shareholder.

AGL share price underperforms on Friday

The AGL share price is trading lower alongside the broader market on Friday. It comes amid yet another potential struggle between tech billionaire Cannon-Brookes and the 185-year-old energy giant.

AGL chair Patricia McKenzie reached out to shareholders in a letter alongside the release of the company’s AGM notice today. Within it, she noted the nomination of four candidates for AGL’s board by Grok Ventures – Cannon-Brookes’ investment company – was “unusual”, before continuing:

While we understand that Grok’s nominations were made in what it believes are the best interests of [the] company, given the depth of energy market and transition experience already represented on the renewed AGL board, the board is of the view that appointing all four of the Grok candidates would not add to [its] overall effectiveness.

Additionally, as AGL’s constitution limits the number of directors to ten, appointing the remaining Grok candidates to the board could limit the board’s ability to bring on additional directors who possess priority skills.

The AGL board recommends shareholders vote to appoint Grok candidate and former Tesla Inc (NASDAQ: TSLA) director Mark Twidell.

However, it doesn’t support the appointment of Dr Kerry Schott, John Pollaers, or Christine Holman.

The post Why is the AGL share price taking a battering on Friday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Atlassian and Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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