Southwest Gas Holdings, Inc. (NYSE:SWX) (“Southwest Gas” or the “Company”) today commented on an open letter to Southwest Gas stockholders published by Carl Icahn on April 4th, 2022, that included a number of false and misleading assertions with respect to the Company’s recent successful public offering of common stock to fund the equity portion of the MountainWest financing.
After thoroughly considering all of the available options, the Southwest Gas Board of Directors executed the equity offering – which was distributed to a diverse set of purchasers and enabled the Company to raise new equity capital in significantly smaller amounts and at a better price than initially projected – to maximize value for all Southwest Gas stockholders.
- In his April 4th letter, Mr. Icahn selectively quoted a letter sent on behalf of the Company to the Court of Chancery in connection with litigation brought against the Company by Mr. Icahn. Mr. Icahn then falsely accused the Company of “playing games” with the record date for the meeting in light of the successful equity financing. That is blatantly untrue. The Board proceeded with the equity offering with full knowledge that the purchasers of the newly issued shares would not be able to vote at the annual meeting because the record date already passed. In fact, SWX’s letter to the court that Mr. Icahn cited also contains the following sentence (which he intentionally did not reference): “Due to the March 21st, 2022 record date for this year’s Annual Meeting, these investors will not vote the newly acquired shares at the May 12th, 2022 Annual Meeting.” The entire letter is enclosed below so that stockholders can judge for themselves who is being honest with them and who is trying to mislead.
- Mr. Icahn also falsely claimed that he made a bona fide offer to purchase all of the equity to finance the MountainWest transaction at $82.50. In fact, Mr. Icahn made his illusory offer only after the Company announced the commencement of the public offering of common stock on March 28th, 2022. When the Company’s financial advisors earlier contacted Mr. Icahn on February 21st, 2022 to better understand the terms on which he would be willing to participate in an equity financing for MountainWest, Mr. Icahn stated that he would only be willing to provide financing if his tender offer closed first or, if the Company agreed to move forward with the tender offer and it did not close, he would provide financing on terms that he declined to define.
- Mr. Icahn also failed to mention it would be illegal for Mr. Icahn to buy shares of SWX in a financing in light of his pending tender offer.
- The Company will not comment on every false or misleading statement by Mr. Icahn, but the scope of yesterday’s misstatements were particularly egregious.
Letter sent on behalf of the Company to the Delaware Court of Chancery:
April 1, 2022
The Honorable Kathaleen St. Jude McCormick
Court of Chancery
500 North King Street
Wilmington, DE 19801
Re: Icahn Partners LP, et al. v. John P. Hester, et al.
C.A. No. 2021-1031-KSJM
Dear Chancellor McCormick:
We write on behalf of Defendants in the above-captioned action to briefly respond to Plaintiffs’ March 29, 2022 letter (“Plaintiffs’ Letter”). First, with respect to the Court’s ruling on Defendants’ pending motion for summary judgment, Defendants appreciate the Court’s diligence regarding the submitted matters and do not make a specific request from the Court in terms of the timing of its decision.
Second, Southwest Gas Holdings, Inc. (the “Company”) recently raised approximately $400 million in equity financing in an underwritten public offering at $74 a share in which a broad set of investors participated. Due to the March 21, 2022 record date for this year’s Annual Meeting, these investors will not vote the newly acquired shares at the May 12, 2022 Annual Meeting. The equity offering will be used to pay down the 364-day term loan that the Company previously used to close the acquisition of Dominion Energy Questar Pipeline, LLC and certain subsidiaries and affiliates (the “Questar Transaction”). The equity offering is both smaller than previously anticipated and at a better price than previously anticipated when the Company completed the Questar Transaction.
Under Rule 14e-5 of the Exchange Act, the Icahn Parties were legally prohibited from participating in this offering because of their pending tender offer. See 17 C.F.R. § 240.14e-5(a).
Finally, Plaintiffs’ Letter speculates inappropriately about Defendants’ motives and possible future events. The Company and its directors are working diligently to protect and enhance the Company’s value for its stockholders, and the directors will continue to exercise their informed and independent business judgment to achieve those goals.
If Your Honor has any questions, counsel is available at the Court’s convenience.
Sincerely,
/s/ Kevin M. Coen
Kevin M. Coen (#4775)
KMC
cc: Richard D. Heins, Esquire
Stephen E. Jenkins, Esquire
