Activist investor Corvex amasses stake in power utility Algonquin -sources

Algonquin Power & Utilities

28/04/2023 20:14

By Svea Herbst-Bayliss and David French
       April 28 (Reuters) - Corvex Management has built a stake
in Algonquin Power & Utilities Corp  AQN.TO , joining other
activist investment firms pushing for changes at the Canadian
power company, people familiar with the matter said on Friday.
    Corvex, which is led by hedge fund veteran Keith Meister,
met with Algonquin's management last week for the first time,
the sources said, describing the meeting as friendly in nature. 
    The size of Corvex's stake in Algonquin, which has a market
capitalization of around C$7.8 billion ($5.75 billion), and its
plans moving forward could not be learned.
    The sources spoke on condition of anonymity to discuss
confidential information. Corvex did not respond to a request
for comment. Algonquin declined comment.
    Algonquin owns and operates regulated utilities, as well as
power generating and water assets, across Canada and the United
States, with its regulated business serving more than 1 million
customers, according to its website.
    The company is grappling with a $7.5 billion debt burden 
following a series of acquisitions in recent years. 
    In January, as part of a plan to bolster its financial
strength, Algonquin said it would seek to raise $1 billion from
selling assets, and would slash its dividend payment to
shareholders by 40%.
    The Oakville, Ontario-headquartered utility announced on
April 17 it had agreed to call off the $2.65 billion acquisition
of the Kentucky unit of American Electric Power Company  AEP.O ,
citing the "evolving macro environment". Activist Ancora
Holdings Group subsequently said it was a "meaningful
shareholder" in Algonquin and asked it to accelerate its
divestment plan.
    Starboard Value LP is also a shareholder in Algonquin and
has been holding discussions with the power company, the sources
said. Bloomberg News first reported on April 21 that the
activist firm, headed by Jeff Smith, was a shareholder in
Algonquin.

($1 = 1.3561 Canadian dollars)

 (Reporting by Svea Herbst-Bayliss and David French in New York;
Editing by Daniel Wallis)
 ((davidj.french@thomsonreuters.com;))