San Diego-based Sempra Energy said Tuesday it has reached a deal with activist Wall Street investors to restructure its board of directors and begin a review of its business.
Sempra, the parent company of San Diego Gas & Electric, announced the “cooperation agreement” with Elliott Management Corporation and Bluescape Energy Partners, which collectively own 4.9 percent of Sempra’s stock.
Following the announcement, Sempra shares were trading down about 1 percent at $117 on Wall Street.
Under the agreement, two new directors who are mutually agreed upon will be added to Sempra’s board and a board committee will begin a review of the utility holding company’s business.
“We are pleased to have reached a positive outcome with Elliott and Bluescape,” said CEO Jeffrey W. Martin, who added that the Sempra management team looks forward to “continued thoughtful examination of our business and capital allocation opportunities.”
Bluescape and Elliott Management launched a public campaign for changes in June, arguing that the company was “deeply undervalued.” Less than a month later, Sempra announced it would sell its renewable energy business. But both investment groups welcomed the new agreement.
“Today’s agreement will help create long-term value for all Sempra Energy shareholders,” said John Wilder, chairman of Bluescape. “This outcome is a credit to the Sempra Energy board, and we believe the board and management are well-positioned to lead the company on this path forward.”
Sempra is the largest utility-holding company in the United States with 20,000 employees and 40 million customers.