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U.S. utility Evergy adds directors in new agreement with activist firm Elliott

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David French
·2 min read
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By David French

Feb 26 (Reuters) - Midwestern utility Evergy Inc said on Friday it would name two additional directors to its board as part of a new settlement with activist investment firm Elliott Management Corp.

The announcement commits Evergy to maintain focus on its Sustainability Transformation Plan (STP) announced in August, with Elliott agreeing to support management until the 2022 annual shareholder meeting, according to a statement from Evergy.

Kansas City, Missouri-based Evergy has been dueling with the hedge fund since Elliott first declared in January 2020 that it owned a stake in the company and wanted a sale of Evergy or significant changes to bolster performance.

An initial agreement struck soon after with Elliott, which ebbed in November, resulted in Evergy running an unsuccessful sale process last summer but yielded a new five-year business plan, the STP, which targeted higher earnings and increased renewables in its generation mix.

According to Friday's statement, John Wilder, a utility industry veteran who supported some of Elliott's other activist campaigns in the power sector through his investment firm Bluescape Energy Partners, will join Evergy's board beginning March 1.

Bluescape will purchase $115 million of newly issued Evergy shares, with an option to buy additional stock at a 20% premium to the current market price over a three-year period, and will be bound by the same 2022 support agreement as Elliott.

Also joining the Evergy board, which expands to 14 members from the previous 12, is former U.S. Senator Mary Landrieu of Louisiana, the statement added.

The board additions came on the same day Evergy announced fourth-quarter earnings slightly lower than the same period of 2019. The company said its 2020 earnings were affected by lower demand due to the pandemic.

It is the first earnings statement since David Campbell was appointed as chief executive. Kirk Andrews started as Evergy's chief financial officer this week. (Reporting by David French; editing by Jonathan Oatis)