Benzinga | Nov 15, 2021 04:39PM EST

Southwest Gas Gives Statement Following Carl Icahn's Icahn Enterprises Provided Notice Of Its Intent To Nominate 10 CAndidates For Co. Board

The Company issued the following statement regarding Icahn's director nominations:

Under the Board's oversight, we have created a company that is poised for further value creation across each of its businesses and the Company as a whole. Icahn's nomination of the Icahn slate follows the Board's rejection of Icahn's unsolicited, inadequate, structurally coercive, highly conditional and illusory tender offer to acquire the outstanding shares of the Company. The nomination of the Icahn slate is the latest step in Icahn's efforts to take control of Southwest Gas without paying a control premium to Southwest Gas stockholders and otherwise pursue his self-serving agenda.

The Board values constructive dialogue with its investors with the mutual goal of enhancing value for all stakeholders -- including for our local communities in partnership with our regulators in each of our three state commissions. As we do with all stockholders, members of the Company's management team have engaged directly with Icahn to hear his views and share ours. In these conversations, Icahn has criticized the pending Questar Pipelines acquisition and pressured Southwest Gas to pursue different alternatives for financing the acquisition -- some of which treat Icahn differently than other stockholders.

The Questar Pipelines transaction is compelling for stockholders both strategically and financially, adding scale and value through an attractive, high-return suite of assets, with unique strength and stability. In addition, our unregulated utility services business, Centuri, has nearly doubled its revenue over the last four years and has strong continuing growth potential. The recent acquisition of Riggs Distler follows the acquisition of Linetec, and is expected to help accelerate Centuri's growth.

The Southwest Gas Board is committed to determining the financing strategy for the Questar Pipelines acquisition that is in the long-term best interest of all Southwest Gas stockholders. No decisions on permanent financing for Questar have been made.

In addition, Southwest Gas recently announced the culmination of a months-long board refreshment process with the appointment of two new, independent and highly qualified directors with proven industry experience and financial and operational expertise to our Board, effective January 1, 2022. With these appointments, the Board has added four independent directors since 2019. The Board also appointed a new Chairman, effective at the Company's 2022 Annual Meeting of Stockholders.

The newly refreshed Board will comprise 10 diverse and experienced professionals, nine of whom are independent and all of whom bring decades of industry experience and expertise in key areas including management, operations, finance, administration and strategic transactions. With significant experience in the industries that matter most to our business, the Southwest Gas directors bring a variety of important skills and perspectives to the boardroom and have delivered impressive growth in both of the Company's business segments while overseeing a constructive and supportive relationship with our regulators. The Board is focused on creating long-term value for the Company and all of our stockholders, and we believe that the Board's relevant skills and experience enhance the Board's ability to make decisions that further this objective.

In contrast, the Icahn slate has been assembled with one goal in mind--to facilitate Icahn's effort to take control of Southwest Gas without paying a control premium.

As previously announced on November 9, 2021, the Southwest Gas Board, after a thorough review with the assistance of its external financial and legal advisors, has unanimously determined that the unsolicited, highly conditional and illusory tender offer from Icahn to acquire the outstanding common shares of the Company for $75.00 per share in cash (the "Offer") is inadequate, undervalues the Company, is structurally coercive and is not in the best interests of all of its stockholders. Accordingly, the Board recommends that stockholders not tender any of their shares into the Offer.

The basis for the Board's decision with regards to Icahn's tender offer is set forth in the Solicitation/Recommendation Statement on Schedule 14D-9 that was filed on November 9, 2021, with the SEC and was also mailed to stockholders.

Consistent with the provisions in the Company's governance arrangements, the Board will review the Icahn slate with the Nominating and Corporate Governance Committee. The Company will announce the date of the 2022 Annual Meeting in due course and file proxy materials with the Securities and Exchange Commission ("SEC"), which will include the Board's recommendation with respect to the election of director nominees and other matters.

Lazard and Moelis & Company LLC are serving as financial advisors to Southwest Gas and Morrison & Foerster LLP and Cravath, Swaine & Moore LLP are serving as legal advisors.