SSE shares up amid hedge fund stake claims

Alistair Phillips-Davies, CEO of SSE

UPDATE 4 — Shares of SSE, the Perth-based energy and networks giant, have risen about 11% to £16.05 in the last few days amid claims in the London news media that US activist hedge fund Elliott Advisors is “secretly” building a stake in the Scottish firm.

Analysts said the reports will fuel speculation over whether SSE could eventually be broken up or taken over.

SSE has a current stock market value of almost £17 billion and the FTSE 100 firm is one of Scotland’s biggest companies and employers.

It is not yet not clear how large Elliott’s shareholding in SSE is — nor why it has taken the position in the company.

SSE and Elliott declined to comment.

Analysts say that recent deals in the sector imply SSE could have a “transaction-based valuation” about 50% higher than its market capitalisation.

On May 26, SSE published results for the year to March 31, 2021, showing adjusted profit before tax rose 4% to £1.064 billion. Reported profit before tax including exceptional items was up 328% to £2.5 billion.

The Perth firm said on May 26 its £7.5 billion capital investment plan in low-carbon projects up to 2025 is on track, with “considerable potential for future growth above and beyond.”

SSE said construction was well under way at flagship SSE Renewables projects including the world’s largest offshore wind farm at Dogger Bank, Scotland’s largest and deepest offshore wind farm at Seagreen off the Angus coast, and at one of Europe’s largest onshore wind farms at Viking in Shetland.

On August 2, SSE said it agreed to sell its entire 33.3% stake in gas distribution operator Scotia Gas Networks Ltd (SGN) for £1.2 billion to a consortium comprising existing SGN shareholder Ontario Teachers’ Pension Plan Board and Brookfield Super-Core Infrastructure Partners.

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.