Utility Management Group
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Hedge fund urges Duke to spin off its Florida utility to unlock value
Elliott Investment Management said Duke Energy Florida and its Midwestern energy company are not generating as much value for shareholders as they could, and called on the utility to spin off the companies so they can focus more deeply on the regions they serve. Duke could generate between $12 billion and $15 billion in value as a result, the firm said.
In a statement, Duke said its board would review the proposal.
Elliott has previously pushed for similar moves at other utilities, and has exchanged proposals with Duke since July 2020.
One of the hedge fund’s main criticisms was that Duke’s Florida company doesn’t perform as well as its peers in the state. It has higher outage times than Tampa Electric Co. and Florida Power & Light, and its customer rates are often higher than those companies. Duke also ranked lowest among Florida power companies in a J.D. Power customer satisfaction ranking last year, the hedge fund said.
Elliott recommended expanding renewable energy and critical infrastructure investments and keeping customer bills lower. Elliott also asked for new board members and changes to the company’s leadership.
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