SSE rejects activist’s new call for break-up of utility
SSE says it has chosen an ‘optimal path’ to growth (pic: Terry Murden)
Activist investor Elliott, the US hedge fund, has ramped up calls for energy company SSE to break itself up.
It claims in an open letter that such a move would boost the energy group’s valuation by 30%.
Elliott has been campaigning on the sidelines for months but has chosen to go public after the FTSE 100 company last month rejected its calls to spin off its renewables division.
Perth-based SSE is valued at more than £17 billion with operations in electricity and gas, and an increasingly large renewables division which is a partner in the UK’s biggest offshore wind farm at Dogger Bank.
Elliott, which says it is a top-five shareholder in the company, has attacked the energy transition strategy, called for the renewables business to be sold off and two new independent directors to be appointed to the board.
Dogger Bank will be Britain’s biggest offshore wind farm
Last month SSE announced a £12.5bn plan to increase investment across its renewable energy and electricity networks businesses over the next five years.
In a clear statement of its intention to rebuff break-up demands it said it would fund the investment by selling a 25% stake in its electricity networks division and cutting the dividend.
In its latest call for change, Elliott has written to SSE chairman Sir John Manzoni, saying the firm’s investment strategy lacked ambition. It called on the company to provide a detailed and credible plan “to address investor concerns around SSE’s corporate governance, its ability to fund its growth in the long term, and its persistent undervaluation”.