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Icahn to launch proxy contest and takeover bid for Southwest Gas

Billionaire investor Carl Icahn, seen in 2015, disputes the measures proposed by Southwest Gas Holdings Inc., this is not the first time he has been agitated with a public service.


Victor J. Blue / Bloomberg

Billionaire investor Carl Icahn stepped up his challenge to Southwest Gas SWX 7.04%

Holdings Inc. by offering to buy Nevada utility stock and announcing its intention to attempt to replace the company’s board of directors.

Mr Icahn challenged Southwest Gas’ proposed acquisition of approximately $ 2 billion of Questar Pipeline Co. from Dominion Energy Inc.

D 0.38%

He argues that the deal for the gas pipeline company that provides transportation and storage services would reduce shareholder value.

On Thursday, Mr. Icahn issued a letter seeking support from other Southwest shareholders and offering to buy shares at $ 75 each. “We are concerned that the Questar deal can only be explained by management’s desire to build an empire and take root,” he wrote.

Southwest Gas shares closed up 7% on Thursday at $ 69.49.

A call to Southwest was not immediately returned. In a letter to Mr Icahn released on Wednesday, Southwest said the Questar deal was priced fair and would contribute to its profits from next year. It also defended its returns and management practices.

Mr Icahn said in the letter that his Icahn Enterprises LP plans to launch a proxy contest to replace the board of directors of Southwest Gas as well as a takeover bid of $ 75 per share. The takeover bid would be conditional, in particular, on the elimination of a recently announced poison pill, according to the letter.

If a third party makes a higher bid, the letter says, “We intend to increase our bid or support this higher bid. “

Warren Buffett’s Berkshire Hathaway Inc.

had agreed to buy Questar for approximately $ 1.7 billion, including debt. Parties abandoned the deal in July over uncertainty over whether it would be cleared by regulators. Dominion said at the time that he intended to sell Questar by the end of the year.

Mr Icahn has agitated other utilities, including FirstEnergy Corp.

earlier this year. He now holds seats on the Ohio Utility Board of Directors.

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