Evergy to Prepare Sale Process After Push From Elliott

(Bloomberg) -- Evergy Inc. is expected to kick off a formal sale process next month after pressure from activist investor Elliott Management Corp. to improve its operations or sell itself, according to people familiar with the matter.

The Kansas City-based utility said that it plans to run a two-pronged strategic review as part of a settlement reached with Elliott in March. The review is focused on finding ways to improve the company’s operations on a standalone basis as well as looking at potential strategic alternatives.

As part of that process, Evergy plans to launch a full sales process in June, said the people, who asked not to be identified because the matter is private. The company and its advisers plan to reach out to several potential buyers to gauge their interest, including NextEra Energy Inc., WEC Energy Group Inc., CMS Energy Corp., Ameren Corp. and American Electric Power Co., the people said.

The process is in its early stages and there is no guarantee any of the parties would pursue a deal or that the process will result in a sale of the company, they added.

The company’s goal is to have proposals in place before the July 30 deadline set for the results of the review to be reported to the board, the people said. Evergy has said it plans to update the market in August on how it will proceed.

Representatives for Evergy declined to comment. Representatives for NextEra, WEC, CMS Energy, Ameren and AEP said they don’t comment on market rumors or speculation.

As part of its settlement with Elliott, Evergy agreed to appoint two new directors to the board. Elliott, the New York-based hedge fund run by billionaire Paul Singer, disclosed a $760 million stake in Evergy in January and urged to company to either replace its leadership and come up with a new operating plan, or merge with another company.

Evergy’s shares have fallen 15% this year, giving the company a market value of $12.6 billion.

The 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. Evergy supplies energy to about 1.6 million customers in Kansas and Missouri, according to its website.

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