Activist Investor Blasts PG&E in Tussle Over Board Overhaul

(Bloomberg) -- Activist investor Jeff Ubben criticized PG&E Corp. for postponing its deadline for nominating board members for a fifth time as the bankrupt utility-owner negotiates with competing shareholder groups.

Ubben, ValueAct Capital Management’s chief executive officer, is part of a slate of director candidates put forth by the hedge fund BlueMountain Capital Management LLC. Others include former California Treasurer Phil Angelides and National Transportation Safety Board ex-chairman Christopher Hart, as well as former utility executives.

“Extension after extension, BlueMountain’s well-vetted and public slate is being ignored, and every shareholder and stakeholder should be disappointed in this process,” Ubben said in an interview. “You apparently have some mystery group of shareholders determining who will next be on the board through closed door negotiations.”

The remarks are the latest in an intensifying battle over who will lead PG&E out of the biggest utility bankruptcy in U.S. history. The San Francisco-based company, which on Tuesday punted the nomination deadline to March 25, is overhauling the board as its power lines are under investigation for a wildfire last year that killed 85 people. PG&E filed for bankruptcy in January, facing liabilities that could exceed $30 billion.

“As the board continues to work through this process of identifying and evaluating candidates, it is committed to engaging with a broad base of shareholders and other stakeholders to solicit their views on new independent director candidates,” PG&E said in an emailed statement.

The competing group of three investors working with the law firm Jones Day -- Knighthead Capital Management LLC, Redwood Capital Management and Abrams Capital Management -- hold slightly less than 10 percent of the company and have registered with regulators. The group has said it will continue to meet with the company about an overhaul of its management and board. The remaining 30 percent are represented individually by the law firm, which allows them to get around certain disclosure rules, including whether they are trading in the stock.

BlueMountain holds about 2.1 percent of PG&E’s outstanding shares, according to the firm. PG&E shares rose 1 percent to $19.26 at 11:15 a.m. in New York.

“We do not know the quality or nature of the directors being considered,” Ubben said. “This is not how well-traded public companies should undergo a board transition.”

To contact the reporters on this story: Scott Deveau in New York at sdeveau2@bloomberg.net;Mark Chediak in San Francisco at mchediak@bloomberg.net

To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, ;Elizabeth Fournier at efournier5@bloomberg.net, Joe Ryan, Reg Gale

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