7 reasons the AGL (ASX:AGL) demerger might be bad for its share price

The AGL Energy Limited (ASX: AGL) share price was out of form on Tuesday despite the release of a major announcement.

After initially storming higher, the energy company’s shares ended the day 3.5% lower at $9.81.

What did AGL Energy announce?

On Tuesday AGL announced provisional plans to split into two businesses – New AGL and PrimeCo.

New AGL will be Australia’s largest multi-product energy retailer, leading the transition to a low carbon future. Whereas PrimeCo will be Australia’s largest electricity generator, supporting the economy as the energy market evolves.

Management believes the proposed separation will give each business the opportunity to execute their own respective strategies and growth agendas.

What’s the…