Icahn Zaps AEP Board

The recent shake-up at American Electric Power Co. (AEP) is kind of a big deal. Julie Sloat, who was CEO for less than 14 months, got the sack after activist investor Carl Icahn won two board seats. Benjamin G.S. Fowke III, a former chairman and CEO of Xcel Energy Inc., is stepping in as interim CEO while the board hunts for a permanent replacement.

AEP's shares went up almost 3% in after-hours trading once the story hit the news, but the company's quarterly earnings report showed revenue that was lower than expected by analysts. “We expect Icahn to look for ways to generate multiple accretion, spanning partial asset sales, potential management changes, to perhaps even a sale of the company in its entirety,” analysts at Guggenheim Securities wrote in a research note on Feb. 13." There's a call with analysts scheduled to discuss these results further.

During Sloat's time in charge, AEP faced regulatory challenges, such as the rejection of a $1.5 billion sale of its Kentucky operations and a $2.2 billion plan for green energy assets in Texas. AEP is a major US electric utility, serving around 5.6 million customers in 11 states.

Icahn's involvement with AEP is part of his recent activity in the American utility sector. He's also been involved with FirstEnergy Corp. and Southwest Gas Holdings Inc. Some people expected leadership changes at AEP after Icahn got involved, but no one knows why Sloat got the boot. Either way, it looks like the board wanted fresh leadership to take the company into its next stage of development. It'll be exciting to see what AEP does next!

#activism