Activist hedge fund Starboard Value LP in a filing on Friday reported a 5 per cent stake in Algonquin Power & Utilities Corp AQU-T, saying it purchased the company’s shares on the belief they were undervalued and represented an attractive investment opportunity.
U.S.-listed shares of Algonquin rose 1.3 per cent to $8.43 in pre-market trade.
The Wall Street Journal first reported on the stake purchase on Thursday, citing people familiar with the matter.
Algonquin had announced in May it had initiated a strategic review of its renewable energy group, following a push by Corvex Management, which built a stake in the company in April, and other activist firms for changes.
The company owns and operates regulated utilities, as well as power generating and water assets, across Canada and the United States, with its regulated business serving more than 1 million customers, according to its website.
It is grappling with a $7.5-billion debt burden following a series of acquisitions in recent years.