- Duke Energy (NYSE:DUK) sees "no strategic logic to breaking the company apart," as proposed by activist shareholder Elliott Management - one of several proposals the firm has made since last July - saying its business is "stronger and more impactful as a consolidated, standalone entity that remains as one."
- Noting its share price has increased 25.2% vs. 18.7% for the S&P Utility Index over the past 12 months, Duke believes "there is no strategic logic to breaking the company apart, and there is serious risk of dis-synergies that would weigh down the various spun-off entities and raise questions about the viability of the dividend to shareholders."
- "A break-up would require extensive regulatory review at the state and federal level, introducing significant execution risk," Duke argues, and "standing up smaller, independent utilities would require considerable new costs and would reverse a decade of cost cutting efforts."
- Duke also takes a swipe at Elliott's "decidedly mixed" track record of investing in power and utility companies such as FirstEnergy, Sempra Energy and Evergy.
- Elliott is seeking board seats at Duke and wants a strategic review committee to explore the potential of a tax-free separation of the utility into three companies, it said in a letter to Duke's board released today.