The directors of Algonquin Power & Utilities Corp. and leaders of the company’s largest shareholder have struck a board refreshment deal that will avoid a proxy battle.
The managers of Starboard Value LP last month nominated three people for board seats, saying that Algonquin’s governance needs “substantial change” because of its “long history of making value-destructive decisions” that include the failed acquisition of Kentucky Power from American Electric Power Co. The firm, which owns about 9% of Ontario-based Algonquin, nominated former Xcel Energy Inc. Chief Customer Officer Brett Carter, Hydro One Ltd. executive Christopher Lopez and corporate strategist Robert Schriesheim to the utility’s board.
Per their new agreement, Algonquin and Starboard said late last week that they intend to add Carter and Lopez to Algonquin’s board. The two men will take the place of longtime Chairman Kenneth Moore—who has helped steer the company and its predecessor entity since 1998—and Masheed Saidi, a former COO of National Grid USA who has been an Algonquin director since 2014.
“Throughout our engagement with Algonquin, we have appreciated the open dialogue with management,” Starboard CEO Jeff Smith said in a statement. “Brett and Chris bring key experience and insight that will complement the rest of the board and support the management team’s pursuit of the company’s strategic objectives. As a significant investor, we look forward to continuing to work constructively with Algonquin.”
The planned board changes come at a time that Algonquin’s leaders are both looking for a new CEO—board member Chris Huskilson has been serving as interim leader since the outer of Arun Banskota last August—and working to sell the company’s renewable energy business. That division finished last year with a combined net generating capacity of about 2.7 gigawatts and also owns 42% of Atlantica Sustainable Infrastructure. Last year, it booked revenues of $310 million, down from $338 million in 2022.
Shares of Algonquin (Ticker: AQN) rose slightly on word of its deal with Starboard and have climbed more since. In midday trading April 22, they were changing hands at $6 after closing at $5.76 the day before the board announced the Starboard news. They have climbed 20% over the past six months, growing the company’s market capitalization to more than $4.1 billion.
