Summary
Sempra Energy (SRE) has entered into a cooperation agreement with activist investors Elliott Associates, L.P., Elliott International, L.P., Bluescape Resources Company LLC, and Cove Key Management, LP. This agreement, effective September 18, 2018, outlines a collaborative approach to board composition and strategic review. A key outcome is the planned appointment of two new mutually agreed-upon directors to Sempra's board within the coming weeks. The board size will temporarily increase to 16 directors to accommodate these appointments. Furthermore, the agreement involves renaming the LNG Construction and Technology Committee to the "LNG and Business Development Committee." This committee will undertake a comprehensive business review of the company, presided over by its chair. The investors have agreed to customary standstill and non-disparagement provisions, generally extending until the end of 2019, with potential extensions. This filing signals a significant development in the company's governance and strategic oversight, driven by investor engagement.
Key Highlights
- 1Sempra Energy entered into a cooperation agreement with Elliott Associates, Elliott International, Bluescape Resources, and Cove Key Management.
- 2The agreement will result in the appointment of two new, mutually agreed-upon directors to Sempra's Board of Directors in the near future.
- 3The size of the Board of Directors will temporarily be increased from 14 to 16 members to facilitate the new appointments.
- 4The LNG Construction and Technology Committee will be renamed the "LNG and Business Development Committee" and will conduct a comprehensive business review.
- 5Two current directors, Debra L. Reed (effective December 1, 2018) and William G. Ouchi (not nominated for re-election), will retire from the Board.
- 6Investors have agreed to customary standstill and non-disparagement restrictions until at least December 31, 2019, with potential extensions.
- 7Investors will vote in favor of Board-nominated directors and in accordance with Board recommendations at shareholder meetings during the cooperation period, with exceptions for certain extraordinary transactions.