Southwest Gas Sets Share Sale Price Below Icahnís Rejected Offer | SWX Message Board Posts

Southwest Gas Corporation

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Msg  71 of 86  at  3/29/2022 5:39:18 PM  by


Southwest Gas Sets Share Sale Price Below Icahnís Rejected Offer


Southwest Gas Sets Share Sale Price Below Icahn’s Rejected Offer

 Scott Deveau and Mark Chediak
Southwest Gas Holdings Inc. priced shares at $74 apiece in a stock sale to fund its $2 billion acquisition of a pipeline company that activist investor Carl Icahn tried to block. The price is below an offer made by Icahn, who has been rebuffed in efforts to take over the utility owner. 

Southwest Gas will raise about $392.5 million from selling 5.5 million shares, with the proceeds used to repay debt from its December purchase of Questar Pipelines from Dominion Energy Inc., the company said in a statement late Monday. Icahn, who earlier proposed to buy up the equity stake himself, had offered $82.50, which was rejected.

The share sale “will go to a diverse set of public purchasers” and enables the Las Vegas-based company to raise new equity capital in “significantly smaller amounts” and at better prices than initially projected, a company spokesperson said in an emailed statement, adding that it’s “the best path forward” to maximize value for shareholders. The offering represents the full amount needed to finance its Questar purchase, and Southwest Gas doesn’t intend to raise any more equity to finance the deal, the person said.

Southwest Gas shares were down 2% on Tuesday in early New York trading, after closing up 0.3% at $79.31 in the prior session.

Icahn, the billionaire who owns almost 5% of Southwest Gas, had slammed the Questar acquisition as overpriced and out of step with Southwest Gas’s primary business. Icahn has been trying to take over the utility owner since it rebuffed his objection and pushed ahead with the deal.

“It’s a complete and total miscarriage of any type of corporate governance,” Icahn said Monday in a phone interview. “This, and the poison pill, make it impossible to have any kind of corporate governance or vote,” he said, adding that the move was being done to subvert the proxy fight.

Icahn, who has threatened legal action if the company issues the new stock for less than he has offered, has also nominated 10 directors to replace its board at the company’s annual shareholder meeting on May 12. He has bashed Southwest Gas Chief Executive Officer John Hester, calling him “the quintessential example of what is wrong in corporate America.”

JPMorgan and Bank of America are leading the sale, and the investment banks involved with the transaction have the option to buy an additional 825,000 shares. Lazard Freres & Co. advised Southwest Gas. The offering is expected to close on March 31.


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