Elliott Management Has Stake in Duke Energy -- Update
May 10 2021 - 2:32PM
Dow Jones News
By Cara Lombardo
Activist investor Elliott Management Corp. has a stake in Duke
Energy Corp. and is pushing the utility 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 might 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 written 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 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 14:17 ET (18:17 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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