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Shares of beleaguered California utility PG&E Corp. (PCG - Get Report)  rose Monday after receiving a price target upgrade by analysts at Morgan Stanley, though it ceded much of the gains after Bloomberg reported that an investor group has offered the company a $4 billion alternative plan that would help it avoid bankruptcy.

PG&E shares initially surged after Morgan Stanley analysts raised their stock price target to $17.50 from $13. In a research note to investors issued on Friday, the brokerage, which has an "equal weight" rating on the utility's stock, said the move was a valuation call.

However, the stock reversed course after Bloomberg reported that New York-based activist hedge fund Elliott Management has proposed $4 billion in convertible debt financing that would buy PG&E time to work with California's government on a plan to solve its liabilities problem.

The company said earlier this month that it plans to file for Chapter 11 bankruptcy protection in the aftermath of major fires in 2017 and 2018.

PG&E shares rose 2% to $12.01 at the close of trading Monday.

Investigators already have determined PG&E's equipment was liable in at least 17 major wildfires in 2017 and it remains unclear whether PG&E will be found liable for November's Camp Fire. That fire killed at least 86 people and destroyed about 14,000 homes, making it the state's deadliest fire.