Big stake built
SSE shares leap amid talk of £20bn takeover bid
SSE’s shares topped the FTSE 100 risers (pic: Terry Murden)
Shares in Perth-based SSE rose sharply today after weekend speculation of a potential £20 billion takeover bid for the energy utility.
It follows the emergence of large stake built up by US activist investor Elliot Management.
The size of Elliott’s shareholding in SSE was unclear or why it has taken the position in the company which has transitioned into one of the UK’s largest renewables businesses.
SSE shares closed 5% or 77.5p higher at 1621p, valuing the company at £17bn, after hitting a year high of 1646p and making it the best performer in the FTSE 100.
The FTSE 100 company’s shares jumped last Wednesday, after a post on the Betaville blog suggested that a large activist investor was building a stake, with the blog naming Elliott on Friday. Those claims were reported by the Mail on Sunday over the weekend.
Analysts say that recent deals in the sector imply the company could have a “transaction-based valuation” 50% than its £16 billion market capitalisation.
Danni Hewson, AJ Bell financial analyst said: “It’s a good day to speculate about the company’s future with ministers focussed on the country’s future energy needs and the potential capital that could be made by the right businesses in the right place with the right plan.
“SSE is an unwieldy behemoth of a business but one with some tasty assets that could whet the appetite of big fish looking not only for a green screen to shelter behind but one that could also be a major money spinner in the right hands.”
SSE reported pre-tax profits of £2.5bn in its last financial year as it continued its offshore wind development strategy, with Bernstein Research saying in recent years that the company should consider selling a stake in, or entirely spinning off, its renewables operations.