$2 billion purchase leaves Icahn fuming

Carl Icahn speaking at Delivering Alpha in New York on Sept. 13, 2016.

 

Activist investor Carl Icahn, yes the same one who holds controlling interest in Oklahoma City’s SandRidge Energy as well as CVR Energy tried but failed to convince Las Vegas-based Southwest Gas not to buy Dominion Energy’s Questar Pipeline in a $2 billion deal.

He revealed earlier Tuesday that he had a 4.9% stake in Southwest Gas and publicly objected to the utility’s acquisition. Hours later, Dominion announced the consummation of the deal, even after Icahn called the acquisition a mistake. Under the acquisition, which is expected to close in the fourth quarter,  Southwest will assume near $430 million in debt.

Icahn contended the price was too high and the deal was coming when regulated utilities are dumping non-core assets and focusing on primary businesses.

“During the past few years, management of SWX has made a number of egregious errors at the expense of shareholders,” he wrote as he criticized Southwest’s poor governance and high costs.

Southwest supplies natural gas for more than 2 million customers in Arizona, Nevada and California. Questar Pipelines is a firm with long term contracts to transport gas and large underground storage assets in Utah, Colorado and Wyoming.