Elliott Management Has Stake in Duke Energy
May 10 2021 - 1:38PM
Dow Jones News
By Cara Lombardo
Activist investor Elliott Management Corp. has a stake in Duke
Energy Corp. and is pushing the utility giant to add directors to
its board and possibly take other actions to boost its stock price,
according to people familiar with the matter.
Duke has been in discussions with Elliott, the people said.
Elliott may also urge Duke to sell some assets or make operational
improvements, some of the people said. The size of Elliott's
position couldn't be learned.
Charlotte, N.C.-based Duke, which has a market value of around
$79 billion and some $55 billion of long-term debt, provides
electricity to nearly eight million customers in six states
including the Carolinas, some Midwestern states and Florida. It
distributes natural gas to 1.6 million customers in Ohio, Kentucky,
Tennessee and the Carolinas.
In recent months, Moody's Investors Service and others have
lowered Duke's long-term debt rating, partly in response to the
recent settlement of litigation concerning the cleanup of ash from
the company's coal-fired plants.
Duke in a statement didn't comment on Elliott's stake but cited
its "strong progress over the last year that has cleared a path
forward for growth, resolved equity needs at a premium valuation,
settled rate cases and coal ash litigation, and accelerated our
clean energy transformation, all of which has led us to increase
our long-term EPS growth rate and outperform the S&P Utility
Index."
The Wall Street Journal reported last year that NextEra Energy
Inc., the largest public utility in the U.S., made a takeover
approach to Duke that was rebuffed. It subsequently made another
approach about a deal for just Duke Energy Florida, according to
people familiar with the matter; so far at least, nothing has come
of that.
Duke on Monday reported mixed first-quarter results, with
better-than-expected profit and revenue just under what analysts
had forecast. The company had $992 million in net income, up from
$938 million for the same period last year, and total revenue of
$6.15 billion, up from $5.95 billion. It said its main electric
utilities and infrastructure division benefited from higher rates
and favorable comparisons.
Elliott, which has more than $40 billion under management, has a
long record of investing in power and utility companies. It
previously targeted companies including Evergy Inc. and Sempra
Energy.
Another activist investor, Carl Icahn, recently took a stake in
FirstEnergy Corp. of Ohio, with an eye toward pushing the utility
to improve its compliance and settle litigation resulting from a
bribery scandal. The utility later reached a deal to add two Icahn
appointees to its board and has since said it began discussions
with the U.S. Department of Justice to resolve the litigation.
Katherine Blunt contributed to this article.
Write to Cara Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
May 10, 2021 13:23 ET (17:23 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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