FirstEnergy Climbs as Icahn Plans to Take Stake in Utility

FirstEnergy Corp. climbed after the company said activist investor Carl Icahn is planning to acquire a stake in the company.

Icahn notified the company in a Feb. 16 letter that he intends to acquire a stake in the company valued at between $184 million and $920 million, according a regulatory filing Thursday. FirstEnergy said it doesn’t know whether the billionaire investor has already acquired any shares or derivatives, or what his intentions may be.

Shares in Akron, Ohio-based utility FirstEnergy jumped 7.4% to $34.31 at 11:18 a.m. in New York, giving the utility a market value of roughly $18.6 billion.

”We thought it was noteworthy and that’s why we’re just being open and transparent about it,” Steven Strah, FirstEnergy’s acting chief executive officer, said on a conference call, declining to comment further. “We just don’t know enough at this point.”

A representative for Icahn wasn’t immediately available for comment.

The news of Icahn’s interest comes as FirstEnergy delivered its fourth-quarter earnings and appointed John Somerhalder as vice chairman. Somerhalder will also serve as executive director and a member of FirstEnergy’s executive leadership team in a transitional capacity. Somerhalder is tasked with trying to rebuild relationships with regulators and the financial community, and improve the company’s governance.

FirstEnergy has been embroiled in a federal corruption case involving the arrest of ex-Ohio House Speaker Larry Householder and four political associates accused of taking about $60 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 other senior executives and had its credit rating downgraded.

FirstEnergy later disclosed that former executives had violated company policies over a $4 million payment for a consulting agreement tied to someone who was later appointed as an Ohio state regulator. A day after the disclosure, Public Utilities Commission of Ohio Chairman Sam Randazzo resigned from his position.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.