Activist Icahn Granted Two Seats on Utility FirstEnergy’s Board
(Bloomberg) -- Activist investor Carl Icahn was granted two seats on the board of FirstEnergy Corp., the Ohio utility embroiled in a federal corruption case involving nuclear subsidies.
Jesse Lynn and Andrew Teno will join FirstEnergy’s board effective March 18, giving it 14 directors, according to a statement Tuesday. The agreement includes voting and standstill restrictions and ensures that Icahn and his associates won’t have substantial influence over FirstEnergy, the company said.
FirstEnergy also agreed to include them on its recommended slate of nominees at its 2021 annual shareholder meeting.
“We are pleased to have reached this agreement,” Donald T. Misheff, non-executive chairman of FirstEnergy, said in a statement. “Our board and management team have been taking decisive actions to address recent challenges.”
Bloomberg News first reported on Icahn’s discussions with FirstEnergy about getting the two seats last week.
Icahn has built a sizable stake in FirstEnergy and is focused on helping the Akron, Ohio-based company put a federal corruption scandal behind it, Bloomberg News has reported. The investor wasn’t seeking control of the board in part because the utility sector is highly regulated when it comes to changes of control.
“Over the past few weeks, we have had constructive discussions with FirstEnergy’s board and management team,” Icahn said in a statement. “We look forward to working with them.”
Icahn in February notified FirstEnergy that he intended to acquire a stake valued at $184 million to $920 million.
Icahn has helped companies navigate challenging times before. He defended Herbalife Nutrition Ltd. against activist investor Bill Ackman, who was shorting its shares.
The federal corruption case involves the arrest of ex-Ohio House Speaker Larry Householder and four political associates accused of taking about $61 million in bribes to secure a bailout for nuclear plants owned by a former FirstEnergy unit. FirstEnergy has since fired its chief executive officer and had its credit rating downgraded.
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