Carl Icahn reveals stake in Southwest Gas, urges company to abandon acquisition

Carl Icahn on Tuesday announced a large stake in Southwest Gas, and the activist investor is pushing the Las Vegas-based utility company to drop its rumor of acquiring natural gas company Questar Pipeline.

“Over the past few years the management of SWX has made a number of glaring mistakes to the detriment of shareholders. However, the purchase of Questar that you are currently making at the price that you are willing to pay will make any mistakes pale. of the past. in comparison, “Icahn wrote in a letter to Southwest’s board released Tuesday. “The purchase will result in a serious decrease in shareholder value.”

Southwest shares climbed more than 5% by midday Tuesday. In his letter, Icahn added that the gas company had not responded to its investigation into the matter.

Southwest did not immediately respond to CNBC’s request for comment.

Icahn’s letter came after Reuters reported that Southwest was in advanced talks to buy Questar, Dominion Energy’s transportation and storage business.

Warren Buffett’s Berkshire Hathaway attacked Questar last year, but the deal was terminated in July due to “lingering uncertainty associated with obtaining Federal Trade Commission clearance.”

In the letter to Southwest’s board of directors, Icahn said he was “extremely disappointed” with management’s performance over the past few years as a “large shareholder”. He cited a “weakened relationship with regulators”, uncontrolled spending and a weakened credit profile.