In a lengthy and detailed letter to the FTSE-100 group’s chairman Sir John Manzoni, Elliott calls on SSE “to act expeditiously to restore investor confidence”. It argues that by splitting off the renewables business into a separate unit, some £5 billion of value would be generated.
The Perth-headquartered energy group frustrated Elliott last month when it opted not to split up the business, arguing in a strategy update that such a move would lead to £95 million a year of lost value.
In its letter Elliott notes: “The strategic initiatives announced on November 17 represent a first step in the evolution of SSE’s structure towards an eventual separation.
“However, your announcement lacked ambition and disappointed your shareholders as well as many analysts and media commentators who were expecting more.
“We believe that - with the right steps - there is a clear path for the company to unlock £5bn of untapped value and establish its leadership position as the UK’s renewables champion.”
In response, SSE chief executive Alistair Phillips-Davies said: “Having conducted a rigorous process involving constructive engagement with shareholders, and consideration of independent advice, we were delighted to launch our net zero acceleration programme on November 17 which represents the optimal pathway to accelerate clean growth, lead the energy transition and create value for all stakeholders.
“Separation risks valuable growth options across the clean energy value chain, would jeopardise our ability to finance and deliver the major infrastructure the UK needs to create jobs and achieve net zero, and would lose shared skills that benefit the group.
“Separation does not support the financing of our core growth businesses and would rule out adjacent growth options, as well as reducing the resilience of the business model - it is not the right outcome to maximise value for shareholders or our other stakeholders.”
Last month, SSE outlined plans to invest £12.5bn over the next five years as it looks to accelerate its net zero plans. The firm said the move makes it the biggest constructor of offshore wind in the world.