Activist investor Elliott Investment Management on Monday urged NRG Energy to make leadership and capital allocation changes, and called the U.S. utility's recent acquisition of Vivint Smart Home a 'strategic misstep'.
to make leadership and capital allocation changes, and called the U.S. utility's recent acquisition of Vivint Smart Home a "strategic misstep".Elliott called for a review of the company's home services strategy, appointment of new independent directors, cost reductions, and a new capital allocation framework to return to shareholders at least 80% of free cash flow.
Successful execution of the plan could create over $5 billion of shareholder value, driving NRG's stock price to reach or exceed $55, the letter said.The company said in December it wouldVivint Smart Home Inc for $2.8 billion in cash, adding security and other automation products to its home service offerings.
The activist investor called the deal "the single worst deal in the power and utilities sector in the past decade". Elliott said funds it manage have an investment of about $1 billion in NRG Energy, representing a more than 13% interest.
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