SSE hands Elliott some logical blowback

Paul Singer, founder and president of Elliott Management Corporation, speaks at WSJD Live conference in Laguna Beach, California, U.S., October 25, 2016.

LONDON, Nov 17 (Reuters Breakingviews) - SSE (SSE.L) has told Paul Singer where to go. The $24 billion UK utility on Wednesday set out plans to invest 12.5 billion pounds to 2026 and more than treble renewable energy capacity to 13 gigawatts by 2031. About 3 billion pounds will come from selling a 25% stake in its networks arm. That’s well short of the full split that Singer, who runs activist investor Elliott Management, appears to be pushing for.

Elliott thinks SSE shares, which dipped 5% to 15.79 pounds on Wednesday morning, are worth less than the sum of the company’s parts. Yet SSE’s key role in enabling the United Kingdom to meet its target for generating 40 gigawatts from wind power by 2030 makes a split politically tricky. The company also reckons it would mean 95 million pounds of additional annual costs. Singer could encounter the same issue as rival activist Dan Loeb has encountered at oil giant Royal Dutch Shell (RDSa.L), read more . When it comes to companies transitioning to zero-carbon energy, many stakeholders think they are better together. (By George Hay)

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Editing by Peter Thal Larsen and Karen Kwok

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