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Sempra Energy ‘encouraged to undertake strategic review’
Posted on Tuesday, 12 June 2018 11:52
Sempra Energy has been urged to initiate a strategic review which could lead to a sale of its international business lines, according to Reuters.
Activist investors Elliot Management and Bluescape Resources, which hold a combined 4.9 per cent of the firm, have issued a letter and presentation to the New York-listed company’s board, in which they stated their belief that a number of its assets have no strategic or financial rationale, the news provider noted.
Accordingly, Reuters said they recommended that Sempra look into the possibility of divesting its international business lines and splitting its existing activities into two separate utilities and natural gas infrastructure companies via a tax-free spinoff.
Sempra has issued a statement on the matter, saying it is reviewing the suggestions and is keen to engage in open dialogue with all shareholders with a view to generating value for them.
The company’s stock closed at USD 117.19 on 11th June, following the announcement, thereby valuing the firm at USD 30.94 billion in its entirety.
This represents a 15.5 per cent increase on the previous day’s close of USD 101.43.
Elliot Management and Bluescape Resources’ other recommendations include the addition of six new directors to the group’s board.
According to Zephyr, the M&A database published by Bureau van Dijk, Sempra Energy’s most recent asset sale took place in June 2013, when it offloaded 43.1 per cent stakes in Sodigas Sur and Sodigas Pampeana to Camuzzi Argentina for around USD 19.40 million.
The prospective vendor employs around 20,000 people and claims to be a leader in the energy services industry.
Its customer base numbers in excess of 40.00 million.
Sempra posted revenue of USD 2.96 billion for the three months to 31st March 2018, down from the USD 3.03 billion generated over the corresponding timeframe of 2017.
Net income for the period totalled USD 358.00 million, compared to USD 452.00 million in Q1 2017.
© Zephus Ltd