Elliott Nears Deal for Two Evergy Board Seats
Elliott Nears Deal for Two Evergy Board Seats
(Bloomberg) -- Evergy Inc. is expected to announce a settlement with activist investor Elliott Management Corp. Monday that includes the appointment of two new directors to the utility’s board, according to people familiar with the matter.
The agreement also calls for a special committee to be created to conduct a top-to-bottom review of the company to find ways to improve shareholder returns, said the people, who asked not to be identified because the matter is private.
Elliott, which disclosed a $760 million stake in Kansas City-based Evergy last month, had urged the company to replace some of its existing management and board.
The New York-based hedge fund, which is run by billionaire Paul Singer, wanted to the see new leadership develop a plan to invest more in critical infrastructure, cut costs, and grow its network. Failing that, it urged the company to explore an all-stock merger with another utility and have that company’s management pursue a similar plan.
Deal Terms
The two sides have been in discussions since Elliott disclosed its stake, and are expected to announce the settlement Monday, when Evergy delivers its fourth-quarter results, the people said. The terms of the agreement would see two new directors appointed to the board and a committee struck to explore ways to improve value for shareholders, including those put forth by Elliott, the people said. It doesn’t include changes to management, they added.
Representatives for Evergy and Elliott declined to comment.
Elliott has a history of pushing for changes at some of the world’s largest and most recognizable companies, including AT&T Inc., EBay Inc. and Pernod Ricard. Its push for change at Evergy came less than two years after the utility was created out of a merger of Westar Energy Inc. and Great Plains Energy Inc.
Kansas, Missouri
Evergy supplies energy to about 1.6 million customers in Kansas and Missouri, according to its website. Shares of the combined company have risen about 26% since the merger was completed in June 2018.
Elliott contends that, since the Westar-Great Plains merger, the company has been overly focused on share buybacks instead of growing its customer base. As a result, its stock price has suffered, Elliott argues.
To contact the reporter on this story: Scott Deveau in New York at sdeveau2@bloomberg.net
To contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Michael Hytha, Matthew Monks
©2020 Bloomberg L.P.