Carl Icahn owns significant stake in Southwest Gas and opposes planned deal

Southwest shares closed up 7% at $ 70.42 on Tuesday after the publication of Mr. Icahn’s letter, which the Wall Street Journal reported earlier today. The shares were trading at over $ 90 each two years ago. The Las Vegas-based company serves more than two million customers in Arizona, Nevada and California.

Mr Icahn, whose son Brett now works alongside him, said in the letter that buying Questar for nearly $ 2 billion would be a huge mistake and reduce shareholder value.

“But even if you don’t pay too much, now is not the time for management with the many problems you are having (including with regulators) to embark on a major new investment especially when you have shown an inability. to manage and control what you already own, ”the octogenarian investor wrote. He said in the letter that he had tried to reach the company and had not received a response.

Southwest did not respond to a request for comment on Tuesday. Dominion declined to comment.

Mr Icahn said the company’s shares have underperformed its peers in regulated gas utilities, its spending has increased and there has been little turnover on its board.

Mr Icahn said that with the appropriate changes, the company’s shares could appreciate to 75%. He said he owns 4.9% of the company’s shares and more including derivatives.

Warren Buffett’s Berkshire Hathaway Inc.

had agreed to buy Questar, a gas pipeline company that provides transportation and storage services, for about $ 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 it was starting a sales process for Questar and aimed to secure a deal 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.

Write to Cara Lombardo at [email protected]