US energy firm Exelon is considering separating out its non-utility assets, people with knowledge of the matter told Bloomberg.
According to the sources, the company has appointed advisors to help it mull over the possibility, which would see it concentrate on its regulated power activities.
However, the people, who did not wish to be identified, said there is no guarantee that a demerger will happen and the group may instead decide to retain its existing corporate structure.
The news follows a recommendation from activist investor Corvex Management, which said separating the non-utility operations would unlock value; it believes Exelon could be worth USD 60.00 per share.
Its stock finished the day at USD 39.98 on 12th October.
Exelon has yet to confirm the possibility, with representative William Gibbons telling Bloomberg that the firm regularly reviews its structure with a view to creating value and positioning it for success.
Bloomberg also cited comments made by chief executive Christopher Crane back in August, when he said Exelon frequently considers whether a separation of its utility and non-utility activities would result in value creation.
The firm’s non-utility operations comprise 21 nuclear reactors and a number of solar, wind and natural gas generating assets.
Exelon employs around 33,400 people and is active 48 US states, as well as the District of Colombia and Canada.
It is active in the power generation, competitive energy sales, transmission and delivery segments and describes itself as the nation’s leading competitive energy provider.
Zephyr, the M&A database published by Bureau van Dijk, shows there have been 1,544 deals targeting utilities companies announced worldwide during 2020 to date.
Of these, the largest was valued at USD 9.70 billion and involved Berkshire Hathaway Energy agreeing to pick up gas transmission and storage segment assets from Dominion Energy back in July.
© Zephus Ltd