Hedge fund Elliott says it has not made demands at Germany's RWE
Recasts to reflect Elliott's statement, changes headline, adds details on Elliott
Nov 6 (Reuters) -Elliott Investment Management said on Wednesday that it has not engaged with German utility RWE AG RWEG.DE about an investment in the company and has not laid out any demands.
The hedge fund issued a statement in reaction to a Bloomberg News report, citing unnamed sources, that said Elliott has built a significant investment in RWE. The report also said Elliott is pushing the company to initiate a share buyback program.
"Bloomberg’s report is false. Elliott has not engaged with anyone at RWE in relation to an investment in the company and has shared no views with RWE regarding buybacks or any other demands," the statement said.
Elliott declined to comment on whether it has built a position or is in the process of building one.
RWE declined to comment.
Frankfurt-listed shares in RWE RWEG.F turned positive on the report and were up 0.6% at 1803 GMT.
Last month, Germany was examining whether it could require investors to disclose a 3% stake that comprises a combination of shares and derivatives after Italy's UniCredit acquired a hefty stake in Germany's Commerzbank.
Buybacks have been a key sticking point for RWE investors who pressed its management for clarity on the subject during a call on its final full-year results in March.
Then, in May, Chief Financial Officer Michael Mueller gave the clearest signal to date that it may consider returning cash to investors via buybacks.
In 2023, RWE rejected a motion by activist fund ENKRAFT against the utility's plans to seek authorization from shareholders to issue convertible bonds without giving existing investors the option to subscribe.
Elliott is one of the world's biggest activist investors with roughly $70 billion in assets and a taste for taking on iconic companies if it feels they can perform better.
In the last months it pushed U.S. coffee chain Starbucks to make changes and reached a truce with Southwest Airlines which adds a number of new directors to the board in a bid to boost returns.
The hedge fund has previously built positions in some companies through derivatives and then converted them into common stock later. Other investors closely watch Elliott's trading activities for hints on which companies the hedge fund may consider pursuing as targets.
Activist investors tend to try and build their stakes before approaching management to lay out criticisms.
Reporting by Bipasha Dey in Bengaluru; additional reporting by Christoph Steitz and Svea Herbst-Bayliss; editing by Alan Barona and Stephen Coates
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
