NRG Energy Inc.
NRG,
stock rose 6.5% in premarket trades Monday after Elliott Management disclosed a $1 billion stake in the power company. Elliott Management unveiled a plan to create $5 billion in shareholder value at NRG including a strategic review of its home services unit Vivint, which the firm described as “the single worst deal in the power and utilities sector in the past decade.” Elliott said it now has a 13% ownership position in NRG. Its value creation plan includes the addition of new independent directors at NRG and an effort to “improve operations and reliability” through $500 million of annual cost reductions. It also called on NRG to refocus on its core business. “Elliott has identified five highly credible executives to help guide the necessary operational and strategic changes,” the firm said. “The board should also evaluate the management team’s ability to drive high-performance operations on a sustained basis.”
