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SSE Has Made No Decision to Split Despite Elliott's Pressure




  • In Business
  • 2021-09-20 08:03:22Z
  • By Bloomberg
 

(Bloomberg) --

SSE Plc said that no decision has been made to split the company after speculation that activist investor Elliott Investment Management is pushing to break up the utility.

"There has been no decision to break up the SSE Group," the company said in a statement. "SSE's strategic focus is on renewables and regulated electricity networks."

The move by Elliott is mistimed with the U.K. energy market in crisis mode as surging power and natural gas prices threaten supplies and push some smaller utilities to the brink of bankruptcy. SSE's Chief Executive Officer, Alistair Phillip-Davies has been involved in emergency talks with the business minister Kwasi Kwarteng over the weekend to discuss how to help the customers of companies in trouble.

Elliott has been building a position in SSE and is said to be putting pressure on SSE management to split its renewables and networks businesses to create two separate companies that would get a higher value. SSE sold its customer business to Ovo Energy Ltd in January.

The statement by SSE "will do little to prevent Elliott from campaigning for a potential split of the businesses," John Musk, analyst at RBC Europe Ltd said in a note.

Under FSA rules, once Elliott's stake reaches 3% they need to disclose an interest within two business days, according to Morgan Stanley. The firm could be nearing that threshold now, the bank calculates.

The next update will be at the company's half year results in November, SSE said.

(Adds detail on energy crisis in third paragraph.)

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