Icahn seeks control of Southwest Gas and the battle of the board begins

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NEW YORK – Carl Icahn said Thursday he was trying to take over the board of directors of Southwest Gas Holdings and replace its chief executive officer, as the Nevada utility moves forward with a planned acquisition that, according to the billionaire activist investor , hurts shareholders.

“Today we announced our intention to launch a proxy contest to replace the entire board of directors and accept a public offering for each and every common stock at $ 75 per share in cash,” Icahn wrote to the Southwest board of directors in an open letter. .

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The stock price closed at $ 69.49 on Thursday.

In a statement late Thursday, Southwest said the board will review the offer when Icahn Enterprises presents it.

Icahn, who has a just under 5% stake in Southwest, plans to appoint two or three people to work for him and find other experts from the utility industry to serve as director nominees, said two sources familiar with him. Icahn thought.

“Regarding Icahn’s intention to nominate a full list of directors for election at Southwest Gas Holdings’ annual shareholders meeting in 2022, the company will respond when it does,” Southwest added in its response.

News of the planned tender and power of attorney comes just hours after the company on Monday adopted a shareholder rights plan, commonly known as a poison pill, to prevent any one investor from owning more than 10% of the company.

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Last week, Southwest agreed to buy Dominion Energy’s Questar Pipelines for $ 1.54 billion in cash and assuming $ 430 million in debt, a move Icahn has criticized.

Icahn said he is concerned that the company will issue shares at “ridiculously low prices to ‘chosen’ friends who will blindly support CEO John Hester.”

“A big responsibility for the company is John Hester and his management team, we are working to put together a blue ribbon board and a management team,” Icahn said in a phone interview, adding that, in his opinion, Hester was playing games. to roulette with shareholders’ money. .

Icahn has had a tangled career with companies and traditionally applies for some board positions when he thinks companies should do better. It is often established with the company and then set aside when its selected directors become involved in operations.

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At Southwest, however, the 85-year-old investor is moving more aggressively, in part because he felt insulted by Hester and her team.

“Management violated our gentlemen’s agreement by announcing a poison pill on Monday,” Icahn wrote in the letter. He added that he was promoting the public offering to give all shareholders another option in addition to the one proposed by the company.

The situation at Southwest reflects Icahn’s activities at the CVR Energy oil refinery, where it gained control in 2012 after shareholders accepted its takeover offer. At CVR, the CEO stayed.

(Reporting by Svea Herbst-Bayliss in New York, Additional reporting by Arathy S Nair, Jahnavi Nidumolu in Bengaluru, and David French in New York; Edited by Shailesh Kuber, Rosalba O’Brien, and Krishna Chandra Eluri)