Elliott pushes for NRG Energy overhaul after disclosing position
Elliott is asking NRG to implement cost cuts worth $500 million
We need to have a national dialogue about energy: Andrew Wheeler
Former EPA administrator Andrew Wheeler gives his take on new regulations on power plants on 'Kudlow.'
Activist investor Elliott Investment Management LP is calling for a boardroom overhaul and strategic changes at NRG Energy after taking a position in the U.S. power company for the second time in six years.
The investment firm, which also pushed for changes at NRG in 2017, wants the company to appoint five new independent board members it has identified and unwind its recent acquisition of home security firm Vivint Smart Home Inc.
NEW HAMPSHIRE ELECTRIC UTILITY PROPOSES MAJOR ELECTRIC TRANSMISSION LINE FROM CANADA TO NEW ENGLAND
Elliott on Monday disclosed a more than 13% economic interest in NRG, which the activist fund said was worth around $1 billion. It did not say how much, if any, of that interest was in NRG stock.
News of Elliott's involvement initially sent NRG's shares up 4.5%, before they gave up some of the gains to trade 3% higher at $33.78 per share around 1:15 p.m. EDT.
Equipment used to capture carbon dioxide emissions is seen at a coal-fired power plant owned by NRG Energy in Thomspsons, Texas, U.S. (REUTERS/Ernest Scheyder / Reuters Photos)
"NRG is committed to creating shareholder value and appreciates Elliott's interest," NRG responded in a statement.
"The company welcomes all shareholders' input and looks forward to an open dialogue with Elliott."
US TRANSITION TO GREEN ENERGY WILL TAKE 'DECADES' PREDICTS CHEVRON EXEC: 'A ROLE FOR OIL AND GAS'
Elliott is asking NRG to implement cost cuts worth $500 million and is also pushing for a strategic review to help the company refocus on its core business of supplying power.
Google Nest Learning Thermostat showing information for Nest Renew, a service that automatically adjusts the thermostat to reduce energy use during peak times, Lafayette, California. | Getty Images
This includes offloading NRG's home services unit, which includes Vivint. The $2.8 billion cash purchase was completed in March.
REPUBLICAN ATTORNEYS GENERAL MOVE TO BLOCK BLACKROCK’S ESG PUSH
Elliott's recommendations, along with a new capital allocation framework to return to shareholders at least 80% of free cash flow, could create over $5 billion of shareholder value and push NRG's stock price above $55 in the next 18 months, it said.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
In February 2017, Elliott and NRG announced a settlement agreement that resulted in the appointment of two board members. Later that year, NRG announced a revised business plan which included plans to sell assets and reduce debt.