AGL Energy has given up on a proposed demerger following a campaign led by tech billionaire and now largest shareholder Mike Cannon-Brookes.

In a statement to the ASX, AGL Energy said its board still believes that carving out its fossil fuel assets into a separate company would have been the best way forward for shareholders, and would have been supported, but would not meet the 75 per cent voter threshold required to proceed. 

“In these circumstances, the AGL Energy Board considers that it is in the best interests of AGL Energy shareholders to withdraw the Demerger Proposal,” the company said. 

It must now seek court approval to stop the demerger, and has launched a strategic review of the company’s future direction.

The split might have gone ahead if not for the intervention of Mr Cannon-Brookes and his investment firm Grok Ventures, which claim that keeping the company together would make it better placed to reach its climate-related goals. 

Furthermore, the failure to demerge has triggered a spill among AGL’s senior management, with the company’s CEO Graeme Hunt and board chair Peter Botten both set to go.

Mr Hunt’s departure will make him the second CEO to quit as a result of the plans, following the departure of Brett Redman last year.

“Chairman Peter Botten will resign from the Board upon appointment of a replacement independent Chairperson,” AGL’s statement says.

“The Board and Graeme Hunt have agreed that Mr Hunt will step down as Chief Executive Officer and Managing Director.”

“Mr Hunt will continue to act in this role until a new Chief Executive Officer and Managing Director is appointed. The Board will immediately undertake a search process to complete this appointment as soon as possible.”

Non-executive director Jacqueline Hey has also resigned, and there are claims that Diane Smith-Gander will follow in August.

AGL says it spent an estimated $160 million on the preparation of the demerger.