British utility SSE defies Elliott, won't spin off businesses
- Dan Primack, author of Axios Pro Rata
Illustration: Brendan Lynch/Axios
SSE, the listed British utility with a market cap of nearly $23 billion, disclosed plans to sell 25% stakes in its transmission and distribution grid units, but said it won't spin off the businesses into independent companies. It also doesn't plan to separate out its renewables assets.
Why it matters: This not only bucks the recent trend of corporate breakups — as employed by GE, J&J and Toshiba — but also pushes back against the wishes of activist investor Elliott Management.
Not alone: Bayer CEO Werner Baumann yesterday said that his company wouldn't follow rival J&J down the breakup path.
The bottom line: "No doubt emboldened by its success at EDP-Energias de Portugal, where it pushed for asset sales to reinvest in green projects, and then saw shares of EDP's listed renewables arm surge, Elliott had been meeting privately with SSE's representatives and investors to make its case for a breakup." — Fareed Sahloul, Bloomberg