Charlotte-based Duke Energy and North Carolina political leaders are fighting back against a Florida hedge fund that wants to break up the company.
The fund, Elliott Management, has a history of targeting public utilities by buying large stakes in the companies and pushing for corporate changes or divestments. In a letter to Duke's board released Monday, Elliott said it wants to split Duke into three separate companies based on geography — the Carolinas, Florida and the Midwest. Elliott argues that Duke's Florida and Midwest utilities are "undermanaged and undervalued" and that the company would be worth more in pieces than combined.
Elliott also wants seats on Duke's board of directors. Elliott notified Duke that recent stock purchases now make it one of the company's 10 largest shareholders. The letter was first reported in the The Wall Street Journal.
Duke confirmed that it has received a series of proposals from Elliott since last July, but the board has rejected them.
"Throughout, Duke Energy’s Board of Directors has reviewed their proposals in depth and determined that they are not in the best interests of the company, its shareholders and other stakeholders," Duke said in a statement.
"Duke Energy will review Elliott’s latest proposals as well and the company is always open to new ideas to create growth and value. However, Duke Energy and its Board of Directors will always advocate for the best long-term interests of its shareholders and other stakeholders over any narrow special or short-term interest," the company said.
Meanwhile, Democratic North Carolina Gov. Roy Cooper and leaders of the Republican-controlled legislature said in a rare joint statement that Duke is an important employer and "valued member of our business community." They expressed concern about "putting our state’s energy future in the hands of a Wall Street hedge fund."
Duke shares were down slightly Tuesday morning. They're up 12% since the beginning of 2021.
