Carl Icahn, a billionaire investor and activist, has been one of the most vocal opponents of the proposed merger between American Airlines and US Airways. He holds significant stakes in both airlines and is urging regulators to block the deal.
Carl Icahn is a businessman who has been involved in many different industries. He is most well known for being the founder of Icahn Enterprises, which he still owns. In addition to his work with Icahn Enterprises, he also holds significant stakes in Southwest Gas and TransCanada Corporation.
In a letter, Carl Icahn said that with the right adjustments, Southwest Gas’ stock might rise by 75%.
Reuters photo/Brendan McDermid
5:55 p.m., October 5, 2021 ET
Carl Icahn, who owns 6.58 percent of Southwest Gas Holdings Inc. SWX, is pressuring the Nevada utility to forgo a planned purchase and instead concentrate on boosting its stock price, according to a letter to the business sent this week.
The letter was sent to Southwest’s board of directors on Monday, a day after it was reported that the company was close to finalizing a deal to buy Dominion Energy Inc.’s D -0.78 percent Questar Pipeline Co. Southwest, which has a market value of $4.2 billion, agreed to buy the company for $1.975 billion, including debt, on Tuesday afternoon.
Following the publication of Mr. Icahn’s letter, which The Wall Street Journal reported on earlier that day, Southwest’s stock rose 7% to $70.42 on Tuesday. Two years ago, the stock was worth more than $90 a share. More than two million consumers in Arizona, Nevada, and California are served by the Las Vegas business.
In the letter, Mr. Icahn, whose son Brett now works for him, argued that buying Questar for almost $2 billion would be a major mistake that would reduce shareholder value.
“But even if you weren’t overpaying, now is not the time for management to go on a significant new investment, particularly since you’ve shown an incapacity to manage and control what you currently own,” the elderly investor wrote. He said in the letter that he attempted to contact the business but received no response.
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A request for comment from Southwest was not returned on Tuesday. Dominion did not respond to a request for comment.
Mr. Icahn claims that the company’s stock has lagged its regulated gas-utility rivals, that its costs have risen, and that the board has seen minimal turnover.
Mr. Icahn believes that with the right adjustments, the company’s stock might rise by 75%. He claimed to hold 4.9 percent of the company’s stock, plus more when derivatives are included in.
Berkshire Hathaway Inc., led by Warren Buffett, agreed to pay $1.7 billion for Questar, a natural-gas pipeline business that offers transportation and storage services. The parties called off the transaction in July due to doubts about whether it would be approved by authorities. Dominion said at the time that it had begun the process of selling Questar and hoped to complete the transaction by the end of the year.
Other utilities have been stirred by Mr. Icahn, including FirstEnergy Corp. early this year. He is currently a member of the Ohio utility’s board of directors.
Cara Lombardo can be reached at [email protected]
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‘Icahn Opposes Southwest Gas Deal’ appeared in the print version of the New York Times on October 6, 2021.