Activist investment vehicle Ananym Capital has built a significant stake in Siemens Energy and is now urging the company to focus on its lucrative gas turbine and power generation business and spin off the much weaker wind power segment.
Citing unnamed sources and a letter sent by the activist investor to the board of the German power utility, the Financial Times said Ananym Capital was doubtful about the profitability prospects of wind power but the gas turbine business had a bright future ahead, thanks to the data center-driven surge in demand for reliable, baseload generation capacity.
“Wind still has a very different and more challenging path ahead of it,” the activist investor reportedly said in its letter to the Siemens Energy board. Ananym added that Siemens Energy’s “true value will likely remain obscured for as long as these businesses remain together”.
The FT report noted that the founder of Ananym Capital, Charlie Penner, was the architect of Engine No. 1’s pressure campaign against Exxon that, somewhat ironically in the context of the latest news, aimed to force the supermajor to spend more money on things like wind and solar.
“Change will not come overnight, but ExxonMobil should fully explore ways to leverage its scale and expertise in delivering energy by exploring growth areas, including more significant investment in net-zero emissions energy sources and clean energy infrastructure, under the guidance of a special committee of the Board with relevant experience created for this purpose,” Engine No. 1 said in its letter in late 2020, launching a proxy fight that ended with the activist investor winning several seats on the board of Exxon.
Even more ironically, the founder of Engine No. 1, Christopher James, two years later called on the energy industry to boost oil production from the Permian to reduce the United States’ dependence on imports. The Permian and the U.S. shale patch as a whole are “arguably the most transition-aligned oil and gas production today” because of the quick turnaround with high returns compared to long-duration capital-intensive projects, James argued at the time.
By Irina Slav for Oilprice.com
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