(Bloomberg) — Algonquin Power & Utilities Corp. is selling its renewable energy business to a subsidiary of LS Power for up to $2.5 billion after pressure from an activist investor.
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Shareholder Starboard Value LP has pushed for a sale of the renewables business for over a year, saying that such a deal would result in lower leverage and ultimately should lead to a higher valuation.
“All things considered I would expect folks at Starboard are happy,” said David Quezada, a research analyst at Raymond James.
Utilities including American Electric Power Co. Inc. and Duke Energy Corp. have sold off renewable assets as investors urge the companies to focus on their regulated businesses, which typically generate stable returns and reliable dividends.
Led by Jeffrey Smith, Starboard has expressed concerns to Algonquin about succession planning, poor balance-sheet management and an ill-fated attempt to buy Kentucky…
