May 25, 2023 | Editor: Henry Hofman
Activist investor pushes for leadership and strategy changes at NRG Energy
Activist investor Elliott Investment Management has disclosed a 13% stake in the US-based NRG Energy and called for leadership and operational changes at the company to remedy its “meaningful underperformance.” The investor urged NRG to add independent directors with experience in the power and energy sector to its board, noting that it has already identified five executives to guide the operational and strategic changes. Additionally, NRG should cut costs and review its home services strategy. Elliott criticized NRG’s acquisition of Vivint Smart Home Inc for USD 2.8 billion, which it called "the single worst deal in the power and utilities sector in the past decade." According to the investor, the execution of its proposed plan could create over USD 5 billion of shareholder value. This is not the first time Elliot has engaged with NRG. Specifically, in 2017, the two parties reached an agreement which resulted in the appointment of two new board members on NRG’s board and the announcement of a revised business plan which included asset divestitures and debt reduction.
Yahoo Finance | Reuters | NRG Energy
Rakuten to raise USD 2.4 billion in share issue
Japan's Rakuten Group plans to raise up to JPY 332 billion (USD 2.4 billion) by issuing new shares, in a bid to shore up its finances impacted by the loss-making mobile business. The announcement prompted the technology conglomerate’s stock to drop by around 5%, extending the loss registered in the previous day. The 546.9 million share issue, which will be carried out through a public offering and third-party allotment, would dilute the value of current shareholders’ holdings by 34%. The company will use the proceeds to repay some of its debt and fund its mobile business.
Rakuten | Yahoo Finance | Financial Post |
British American Tobacco (“BAT”)
appoints new CEO
BAT has appointed finance director Tadeu Marroco as its new CEO. Morocco is replacing Jack Bowles, who unexpectedly resigned after four years in the role. Director Javed Iqbal will take over as interim finance director. The leadership changes come a few weeks after the tobacco company had reached a settlement with the US authorities to pay over USD 635 million in fines for conspiring to violate US sanctions by selling tobacco products to North Korea. Moreover, BAT has recently faced pressure from Asset manager GQG Partners, its fifth largest shareholder, to shift its primary listing from London to New York.
BAT | Yahoo Finance | This is Money | BBC | The Guardian
Trian increases stake in Walt
Trian Partners has reportedly recently purchased 500,000 Walt Disney shares, increasing its stake in the media and entertainment company to 6.4 million shares. Earlier this year, Trian slashed its shareholding in Disney by 34%, after reaching a truce with the company. The activist investor had campaigned for a seat for its CEO, Nelson Peltz, on Disney’s board, criticizing the media company’s handling of its 2019 Fox acquisition as well as its failure to establish effective succession planning. Trian dropped its proxy fight in February after Disney unveiled a restructuring plan that included USD 5.5 billion in cost cuts and layoffs.
Yahoo Finance | Business Times | Reuters
Governance in Brief – June 1, 2023
Citigroup to IPO Banamex after Mexican gov’t interventions hamper sales deal Citigroup has announced a plan to spin off its Mexican business, Banamex, after a failure to sell the unit to conglomerate Grupo Mexico. Citigroup had been in talks with German Larrea, CEO and Chairman of Grupo Mexico, for over a year in an attempt to orchestrate the sale of the bank, which was first announced at the start of 2022.
Governance in Brief – May 25, 2023
Activist investor pushes for leadership and strategy changes at NRG Energy Activist investor Elliott Investment Management has disclosed a 13% stake in the US-based NRG Energy and called for leadership and operational changes at the company to remedy its “meaningful underperformance.” The investor urged NRG to add independent directors with experience in the power and energy sector to its board, noting that it has already identified five executives to guide the operational and strategic changes.
Governance in Brief – May 19, 2023
EU court sides with Ryanair on Lufthansa’s 2020 bailout. The EU General Court, the second-highest court in the EU, has annulled the European Commission’s decision on the approval of state bailout for Deutsche Lufthansa prompted by the 2020 pandemic. The judgment found the EC erroneously considered that Lufthansa could not obtain financing on the markets and failed to ask for the implementation of an incentive mechanism for the airline to buy back the German Government’s stake.
Governance in Brief – May 11, 2023
JPMorgan Chase takes over failed First Republic Bank JPMorgan Chase has acquired the assets and deposits of First Republic Bank after California authorities seized and auctioned the troubled lender. The Federal Deposit Insurance Corporation (“FDIC”), an independent governmental agency established to maintain financial stability through the insurance of banks’ deposits, took possession of First Republic Bank after the lender suffered a severe liquidity crisis following the failure of SVB and Signature Bank earlier in March.