Elliott, run by Paul Singer, owns 11.3 million Evergy shares valued at $760 million, which translates to about 5% of the Kansas City, Mo., company’s $15.65 billion market capitalization.
Elliott is Evergy’s fourth-largest shareholder, according to data compiled by Bloomberg.
In a letter to Evergy’s board, Elliott Management urged the company to take steps that it estimated could add $5 billion, or 32%, to its market cap.
“Evergy’s valuation does not properly reflect the value of its collection of high-quality regulated utilities in Kansas and Missouri,” the letter said.
“A renewed focus on improving core utility operations and investing in Evergy’s critical electric infrastructure can rectify its prolonged underperformance, discounted valuation and associated increased cost of capital.”
The investment manager said that Evergy should bring in new board members and management and explore a stock-for-stock merger, enabling Evergy's new owner to oversee the new action plan.
Elliott said that in October it sought to engage the Evergy board privately to spur change but was rebuffed.
Evergy shares at last check stood at $68.71, up 2%.
Evergy’s stock has gained 22% over the past year, including Tuesday’s gain, compared with 28% for the Dow Jones Utility Average.
Elliott argues that increased system investment would provide more value to shareholders than the current strategy to repurchase shares.
It also would provide more benefit to Evergy's other stakeholders, help facilitate the company's deployment of renewable energy and reduce its carbon footprint, the fund said.