Hedge funds want to split Duke Energy. North Carolina political leaders have other ideas.


Governor Roy Cooper and state legislature leaders have proposed to North Carolina regulators a Florida-based hedge fund proposal to split Charlotte-based Duke Energy into three separate companies. I asked for a “strict scrutiny”.

The Wall Street Journal reported: Elliott Management Corporation Elliott made the proposal in a letter to Duke’s board of directors released on Monday. Elliott told Duke in a letter that it was one of the 10 largest shareholders of the utility business, the journal reported, and Duke said the company sought a seat on Duke’s board of directors.

Duke will be split into three companies based on its geographical footprint: in Carolina, the Midwest, and Florida, the journal reported. North Carolina political leaders immediately called attention.

Bipartisan statements from Cooper, Senator Phil Berger, and House Speaker Tim Moore pointed out that Duke has existed in Carolina for over a century and employs thousands of people. .. As the state moved away from the pandemic, it cited the value of “strong and independent state utility.”

“But beyond the pride of state-owned enterprises, the reality is that Duke is providing reliable and cost-effective energy to millions of North Carolina citizens,” the statement said. “There are natural concerns associated with putting our state’s energy future in the hands of Wall Street hedge funds, and we look forward to the North Carolina Utility Commission scrutinizing such arrangements. “

Public utility commissions, of which seven members are appointed by the governor with the approval of the legislator, must approve such a corporate split, as do federal agencies and other state committees.

In a long response to Elliott’s proposal, Duke said the hedge fund announcement was the latest in a series of fund proposals since July last year. Duke said the board decided that the previous proposal was “not in the best interests of the company, shareholders and other stakeholders.”

‚ÄúDuke Energy is also considering Elliott’s latest proposals and the company is constantly embracing new ideas for growth and value. However, Duke Energy and its board of directors are more than narrow extraordinary or short-term profits. Always insists on the best long-term interests of shareholders and other stakeholders. “

Duke defended his current financial performance and said he plans to achieve annual revenue growth of 5% to 7% over the next 10 years. Shares have risen 25.2% in the last 12 months, well above the S & P Utility Index’s 18.7%, according to Duke. Duke’s share price fell 61 cents on Monday, closing at $ 102.45.

Duke is one of the largest electricity holding companies in the United States as a result of previous mergers, including a merger between Synergy Corporation of Ohio in 2006 and Progress Energy based in Raleigh in 2012, in the Midwest and Florida. I enlarged the footprint. It serves 7.8 million electricity customers in six states and 1.6 million natural gas customers in Carolina, Ohio, Kentucky and Tennessee.

ElliottThe journal reports that it manages an investment of about 42 billion dollars and has a long record of investment in power companies and utility companies.

Florida based NextEra Energy The journal and other media outlets reported in September last year that it approached Duke about the potential acquisition last year.

Posted on