Activist Investor Carl Icahn Just Revealed He Bought a Stake in This Company
Activist investor Carl Icahn revealed this week that he has a stake in Southwest Gas and has urged the company to drop the acquisition of natural gas company Questar Pipeline.
Icahn has taken a sizeable stake in the Las Vegas-based utility company according to his announcement.
“During the past few years, management of SWX has made a number of egregious errors at the expense of shareholders. However, the purchase of Questar you are currently being rumored to make at the price you are willing to pay will make all past errors pale in comparison,” Icahn wrote in a letter to Southwest’s board of directors made public on Tuesday. “The purchase will result in serious diminution of shareholder value.”
Shares of Southwest climbed more than 7% in afternoon trading Tuesday as Wall Street digested the letter.
Icahn also added in the letter that the the gas company didn’t respond to his inquiry on this matter.
Not long ago Reuters reported that Southwest is in advanced talks to buy Questar, Dominion Energy’s transportation and storage business.
Warren Buffett’s Berkshire Hathaway was going after Questar last year, but the deal was terminated this summer due to “ongoing uncertainty associated with achieving clearance from the Federal Trade Commission.”
In the letter to Southwest’s board, Icahn remarked that he is “extremely disappointed” with management’s performance over the past few years as “a large shareholder.”
Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.