By Jaime Llinares Taboada
Elliott Advisors (UK) Ltd., one of the largest shareholders in SSE PLC, on Tuesday called on the company to restore investor confidence.
The Elliott Management Corp. subsidiary, which has been reportedly pushing for the separation of SSE's renewables business, said in a letter to Chairman John Manzoni that it was challenging the energy company to provide a plan to address investor concerns around its corporate governance, its ability to fund growth in the long term, and its "persistent undervaluation".
Specifically, the shareholder said the letter "was sent in the wake of the company's disappointing announcement on Nov. 17 and the resulting decline in SSE's stock price". That day shares in SSE closed 4.3% lower after the group said it would cut the dividend and sell stakes in its network business to fund investment in renewables.
Elliott said that the announcement failed to provide any explanation for why SSE wasn't pursuing a listing of the renewables assets, which the investor estimates could have unlocked 5 billion pounds ($6.63 billion) of value. In addition, Elliott said the plan to sell a minority interest in the networks division lacked ambition, and that cutting the dividend disappointed many income-oriented investors.
A representative for SSE wasn't immediately available for comment.
Write to Jaime Llinares Taboada at email@example.com; @JaimeLlinaresT