Elliott Management Has Stake in Duke Energy -- Update

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 [e-mail]

(END) Dow Jones Newswires

May 10, 2021 14:17 ET (18:17 GMT)

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