SAN DIEGO, Sept. 18, 2018 /PRNewswire/ -- Sempra Energy
(NYSE: SRE) today announced that it has entered into a cooperation
agreement with affiliates of Elliott Management Corporation
(Elliott) and Bluescape Energy Partners LLC (Bluescape). Funds
affiliated with Elliott and Bluescape collectively own a
4.9-percent economic interest in Sempra Energy valued at
$1.6 billion.
Board Enhancement
As part of the agreement and the ongoing refreshment of the Sempra
Energy board, the parties have worked cooperatively together to
identify a discrete list of final board nominees and expect to work
together for Sempra Energy to announce and appoint two new
directors to Sempra Energy's board that are mutually agreed between
the parties in the coming weeks.
LNG and Business Development Committee
Additionally,
Sempra Energy will repurpose its board's current LNG Construction
and Technology Committee into a new LNG and Business Development
Committee. The new committee will consist of its three current
members and, upon appointment to the Sempra Energy board, the two
new directors.
The LNG and Business Development Committee's updated charter
calls for it to work with management and the board in leading a
comprehensive review of Sempra Energy's businesses. The
charter also allows the committee to retain its own independent
consultants and advisors. Sempra Energy intends to update the
market on the results to date of the strategic review, including
any actions to be taken, in the first quarter of 2019.
Elliott and Bluescape also have agreed to customary standstill,
voting and other provisions.
"Sempra Energy is committed to an open dialogue with our
shareholders and to considering all investor perspectives on the
company's existing strategy and longer-term opportunities to create
shareholder value," said Jeffrey W.
Martin, CEO of Sempra Energy. "We are pleased to have
reached a positive outcome with Elliott and Bluescape. Our
management team looks forward to working with the LNG and Business
Development Committee and our full board on the continued
thoughtful examination of our business and capital allocation
opportunities."
Jesse Cohn and Jeff Rosenbaum of Elliott issued the following
statement: "This announcement is the result of a constructive
dialogue with Jeff Martin, Sempra
Energy's senior management team and board, and we look forward to
continuing the collaborative relationship. Our interactions with
the Sempra Energy team have given us confidence in their direction
and ability to execute. We are confident that Jeff and his
team, along with the directors who will be added to the board and
the LNG and Business Development Committee's review, will lead a
new era of sustainable value creation for all of Sempra Energy's
stakeholders."
"Today's agreement will help create long-term value for all
Sempra Energy shareholders," said John
Wilder, chairman of Bluescape. "This outcome is a credit to
the Sempra Energy board, and we believe the board and management
are well-positioned to lead the company on this path forward."
The full cooperation agreement between Sempra Energy and Elliott
and Bluescape will be filed on a Form 8-K with the Securities and
Exchange Commission.
About Elliott
Elliott Management Corporation manages
two multi-strategy investment funds which combined have
approximately $35 billion of assets
under management. Its flagship fund, Elliott Associates, L.P., was
founded in 1977, making it one of the oldest funds of its kind
under continuous management. The Elliott funds' investors include
pension plans, sovereign wealth funds, endowments, foundations,
funds-of-funds, high net worth individuals and families, and
employees of the firm.
About Bluescape
Bluescape, founded in 2007, is a
private investment firm focused on value-oriented investments in
the upstream oil and gas and power industries. Bluescape employs a
unique approach and long-term perspective, helping position
companies for growth and value creation by providing capital and
strategic oversight with its multi-disciplined team of
executive-level managers, operators, strategic consultants, and
restructuring advisors.
About Sempra Energy
Sempra Energy, a San Diego-based energy services holding
company with 2017 revenues of more than $11 billion, is the
utility holding company with the largest U.S. customer base. The
Sempra Energy companies' approximately 20,000 employees serve more
than 40 million consumers worldwide.
This press release contains statements that are not
historical fact and constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements can be identified by words such as
"believes," "expects," "anticipates," "plans," "estimates,"
"projects," "forecasts," "contemplates," "assumes," "depends,"
"should," "could," "would," "will," "confident," "may," "can,"
"potential," "possible," "proposed," "target," "pursue," "outlook,"
"maintain," or similar expressions or discussions of guidance,
strategies, plans, goals, opportunities, projections, initiatives,
objectives or intentions. Forward-looking statements are not
guarantees of performance. They involve risks, uncertainties and
assumptions. Future results may differ materially from those
expressed in the forward-looking statements.
Factors, among others, that could cause our actual results
and future actions to differ materially from those described in any
forward-looking statements include risks and uncertainties relating
to: actions and the timing of actions, including decisions, new
regulations, and issuances of permits and other authorizations by
the California Public Utilities Commission, U.S. Department of
Energy, California Department of Conservation's Division of Oil,
Gas, and Geothermal Resources, Federal Energy Regulatory
Commission, U.S. Environmental Protection Agency, Pipeline and
Hazardous Materials Safety Administration, Los Angeles County
Department of Public Health, Public Utility Commission
of Texas, states, cities and counties, and other regulatory
and governmental bodies in the U.S. and other countries in which we
operate; the timing and success of business development efforts and
construction projects, including risks in timely obtaining or
maintaining permits and other authorizations, risks in completing
construction projects on schedule and on budget, and risks in
obtaining the consent and participation of partners and
counterparties; the resolution of civil and criminal litigation and
regulatory investigations; deviations from regulatory precedent or
practice that result in a reallocation of benefits or burdens among
shareholders and ratepayers; denial of approvals of proposed
settlements or modifications of settlements; and delays in, or
disallowance or denial of, regulatory agency authorizations to
recover costs in rates from customers or regulatory agency approval
for projects required to enhance safety and reliability, any of
which may raise our cost of capital and materially impair our
ability to finance our operations; the greater degree and
prevalence of wildfires in California in recent years and
risk that we may be found liable for damages regardless of fault,
such as in cases where the inverse condemnation doctrine applies,
and risk that we may not be able to recover any such costs in rates
from customers in California; the availability of electric
power, natural gas and liquefied natural gas, and natural gas
pipeline and storage capacity, including disruptions caused by
failures in the transmission grid, moratoriums or limitations on
the withdrawal or injection of natural gas from or into storage
facilities, and equipment failures; changes in energy markets,
volatility in commodity prices and moves to reduce or eliminate
reliance on natural gas; risks posed by actions of third parties
who control the operations of our investments, and risks that our
partners or counterparties will be unable or unwilling to fulfill
their contractual commitments; weather conditions, natural
disasters, accidents, equipment failures, computer system outages,
explosions, terrorist attacks and other events that disrupt our
operations, damage our facilities and systems, cause the release of
greenhouse gases, radioactive materials and harmful emissions,
cause wildfires and subject us to third-party liability for
property damage or personal injuries, fines and penalties, some of
which may not be covered by insurance (including costs in excess of
applicable policy limits), may be disputed by insurers or may
otherwise not be recoverable through regulatory mechanisms or may
impact our ability to obtain satisfactory levels of insurance, to
the extent that such insurance is available or not prohibitively
expensive; cybersecurity threats to the energy grid, storage and
pipeline infrastructure, the information and systems used to
operate our businesses and the confidentiality of our proprietary
information and the personal information of our customers and
employees; our ability to successfully execute our plan to divest
certain non-utility assets within the anticipated timeframe, if at
all, or that such plan may not yield the anticipated benefits;
actions of activist shareholders, which could impact the market
price of our common stock, preferred stock and other securities and
disrupt our operations as a result of, among other things,
requiring significant time and attention by management and our
board of directors; capital markets and economic conditions,
including the availability of credit and the liquidity of our
investments; fluctuations in inflation, interest and currency
exchange rates and our ability to effectively hedge the risk of
such fluctuations; the impact of recent federal tax reform and
uncertainty as to how it may be applied, and our ability to
mitigate adverse impacts; actions by credit rating agencies to
downgrade our credit ratings or those of our subsidiaries or to
place those ratings on negative outlook and our ability to borrow
at favorable interest rates; changes in foreign and domestic trade
policies and laws, including border tariffs, and revisions to
international trade agreements, such as the North American Free
Trade Agreement, that make us less competitive or impair our
ability to resolve trade disputes; the ability to win competitively
bid infrastructure projects against a number of strong and
aggressive competitors; expropriation of assets by foreign
governments and title and other property disputes; the impact on
reliability of San Diego Gas & Electric Company's (SDG&E)
electric transmission and distribution system due to increased
amount and variability of power supply from renewable energy
sources; the impact on competitive customer rates due to the growth
in distributed and local power generation and the corresponding
decrease in demand for power delivered through SDG&E's electric
transmission and distribution system and from possible departing
retail load resulting from customers transferring to Direct Access
and Community Choice Aggregation or other forms of distributed and
local power generation, and the potential risk of nonrecovery for
stranded assets and contractual obligations; the ability to realize
the anticipated benefits from our investment in Oncor Electric
Delivery Holdings Company LLC (Oncor Holdings); Oncor Electric
Delivery Company LLC's (Oncor) ability to eliminate or reduce its
quarterly dividends due to regulatory capital requirements, certain
reductions in its senior secured credit rating, or the
determination by Oncor's independent directors or a minority member
director to retain such amounts to meet future requirements; and
other uncertainties, some of which may be difficult to predict and
are beyond our control.
These risks and uncertainties are further discussed in the
reports that Sempra Energy has filed with the U.S. Securities and
Exchange Commission (SEC). These reports are available through the
EDGAR system free-of-charge on the SEC's
website, www.sec.gov. Investors should not rely
unduly on any forward-looking statements. These forward-looking
statements speak only as of the date hereof, and the company
undertakes no obligation to update or revise these forecasts or
projections or other forward-looking statements, whether as a
result of new information, future events or otherwise.
Sempra South American Utilities, Sempra North American
Infrastructure, Sempra LNG & Midstream, Sempra Renewables,
Sempra Mexico, Sempra Texas Utility, Oncor Electric Delivery
Company LLC (Oncor) and Infraestructura Energética Nova, S.A.B. de
C.V. (IEnova) are not the same companies as
the California utilities, San Diego Gas & Electric
Company (SDG&E) or Southern California Gas Company (SoCalGas),
and Sempra South American Utilities, Sempra North American
Infrastructure, Sempra LNG & Midstream, Sempra Renewables,
Sempra Mexico, Sempra Texas Utility, Oncor and IEnova are not
regulated by the California Public Utilities Commission.
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SOURCE Sempra Energy