By Cara Lombardo and Dana Cimilluca
Activist investor Elliott Management Corp. is urging Duke Energy Corp. to consider separating into three companies, in what would be a major transformation of one of the nation's biggest utilities.
Elliott is seeking board seats at Duke and wants the company to form a strategic-review committee that would explore the possibility of a tax-free separation of the utility into three companies, according to people familiar with the matter. The three companies would be based on the three major geographies it serves: the Carolinas, Florida and parts of the Midwest.
The Wall Street Journal previously reported that Elliott had a stake in Duke and was agitating for change, but the firm's exact intentions weren't clear, nor was the size of its stake. Elliott told Duke in a letter that it is one of its 10-largest shareholders, which would put the stake above $900 million, one of the people said.
Charlotte, N.C.-based Duke, which has a market value of around $65 billion, provides electricity to nearly eight million customers in six states including the Carolinas, some Midwestern states and Florida. It distributes natural gas to 1.6 million customers in Ohio, Kentucky, Tennessee and the Carolinas.
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(END) Dow Jones Newswires