Carl C. Icahn Issues Open Letter to
Board of Directors of Southwest Gas
Sunny Isles Beach, Florida, November 11, 2021 — Today, Carl C. Icahn released the following open letter to the board of directors of Southwest Gas Holdings, Inc. (NYSE: SWX).
Harkins Kovler, LLC
Peter Harkins / Jordan Kovler
(212) 468-5390 / (212) 468-5384
CARL C. ICAHN
16690 Collins Avenue, Suite PH-1
Sunny Isles Beach, FL 33160
November 11, 2021
We offered on October 25th to provide SWX with $75.00 per common share for the ∼$1 billion of equity financing the company stated it would seek to help pay for the ill-advised Questar acquisition. We also said we would be willing to consider providing this financing at a per share price higher than $75.00 if SWX should receive a bona-fide superior offer from any other stockholder or third party. And we would agree that if we did not increase our offer, we would support the higher bid. Additionally, we went even further and offered to forego voting rights with respect to all shares we might end up holding in excess of 20% of the voting power of the company as a result of this transaction.
However, our generous – and unconditional – offer was met with deafening silence from you. Instead, you have enabled management to signal that the company might issue a huge block of stock at bargain-basement prices to one or more friendly parties that would presumably protect management from any and all accountability in the future. The board seems to have forgotten that it has fiduciary responsibilities to stockholders – not to management. Your shielding of this inept and self-serving management team – at your own legal peril, no less – is baffling to us, especially in light of management’s abject failure when compared with the management teams at the companies in SWX’s peer group. We would not be surprised to learn that your well-heeled investment banking and legal “defense” team has told you not to worry about your own personal liability. However, remember that it will not be them being forced to give depositions under oath to defend the board’s actions – but rather you. Do you really want to explain to a judge or jury why you thought it was a great idea to sell stock at less than $75 per share when you and your stockholders – as well as the world at large – knew you had an unconditional firm offer from us at $75? You will also have to explain why you allowed a large block of stock to be placed in “friendly hands” at a bargain price merely to protect inept management and keep them totally unaccountable to stockholders.
We are writing to put all on notice that if SWX attempts to dilute existing stockholders by issuing a block of stock at less than $75 per share without first attempting to negotiate with us, we will pursue every avenue available to seek legal redress and to compel SWX directors to fully discharge the fiduciary duties they owe to ALL stockholders. Furthermore, depending on the circumstances, we may also consider bringing legal actions against any purchasers in such a “cheap stock” transaction for aiding and abetting the breach of fiduciary duties by the SWX board at the expense of SWX stockholders.
To preempt any excuses this board might be preparing for not considering our unconditional good faith offer, we would point out the many, many companies we have helped over the years in a cooperative fashion to create literally many hundreds of billions of dollars of value for ALL stockholders of these companies. To name just a few recent ones – FirstEnergy, Caesars, Cheniere, Ebay/PayPal, Motorola, Herbalife, Manitowoc, Forest Laboratories, Cloudera, Hologic. Are we infallible? Of course not. But we believe the handful of “losers” in our record can largely be chalked up to secular changes and not to our actions. What excuse does the SWX management team have for doing so poorly in comparison to their peers and then getting rewarded for their less than mediocre record? But regardless of track records, it is undisputed that we are currently offering the highest price for this proposed stock issuance.
In recent days, management has hinted at perhaps selling 19.9% of the equity of the company’s services subsidiary for $500 million. If that price can be achieved, we would support that sale. But we would not support the sale at a lower price. We also would support other value-maximizing ideas so long as they achieve the highest and best values for the company. Our point is simple – you have a fiduciary duty to try to maximize value for the company and its stockholders. If you do that, you will get our support. If you do not, we will hold you accountable – just as you should hold accountable the management of SWX.
We stand ready to negotiate. We can act extremely quickly as we do not operate leisurely through committees. We can and will respond to any proposals within 24 hours. We have no need of financing or due diligence. We look forward to hearing from you.
Carl C. Icahn
Additional Information and Where to Find It;
Participants in the Solicitation and Notice to Investors
SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY CARL C. ICAHN AND HIS AFFILIATES FROM THE STOCKHOLDERS OF SOUTHWEST GAS HOLDINGS, INC (“SOUTHWEST GAS”) FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS OF SOUTHWEST GAS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY SOLICITATION. WHEN COMPLETED, A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY WILL BE MAILED TO STOCKHOLDERS OF SOUTHWEST GAS AND WILL ALSO BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION’S (“SEC”) WEBSITE AT HTTP://WWW.SEC.GOV. INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY SOLICITATION IS CONTAINED IN THE SCHEDULE 14A FILED BY CARL C. ICAHN AND HIS AFFILIATES WITH THE SECURITES AND EXCHANGE COMMISSION ON OCTOBER 5, 2021. EXCEPT AS OTHERWISE DISCLOSED IN THE SCHEDULE 14A, THE PARTICIPANTS HAVE NO INTEREST IN SOUTHWEST GAS.
THE SOLICITATION DISCUSSED HEREIN RELATES TO THE SOLICITATION OF PROXIES FOR USE AT THE 2022 ANNUAL MEETING OF STOCKHOLDERS OF SOUTHWEST GAS HOLDINGS.
THIS COMMUNICATION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT A RECOMMENDATION, AN OFFER TO PURCHASE OR A SOLICITATION OF AN OFFER TO SELL SHARES. IEP UTILITY HOLDINGS LLC AND ICAHN ENTERPRISES HOLDINGS L.P., AFFILIATES OF ICAHN ENTERPRISES, FILED A TENDER OFFER STATEMENT AND RELATED EXHIBITS WITH THE SEC ON OCTOBER 27, 2021. SWX FILED A SOLICITATION/ RECOMMENDATION STATEMENT WITH RESPECT TO THE TENDER OFFER WITH THE SEC ON NOVEMBER 9, 2021. STOCKHOLDERS OF SWX ARE STRONGLY ADVISED TO READ THE TENDER OFFER STATEMENT (INCLUDING THE RELATED EXHIBITS) AND THE SOLICITATION/RECOMMENDATION STATEMENT, AS THEY MAY BE AMENDED FROM TIME TO TIME, BECAUSE THEY CONTAIN IMPORTANT INFORMATION THAT STOCKHOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SHARES. THE TENDER OFFER STATEMENT (INCLUDING THE RELATED EXHIBITS) AND THE SOLICITATION/RECOMMENDATION STATEMENT ARE AVAILABLE AT NO CHARGE ON THE SEC’S WEBSITE AT WWW.SEC.GOV. THE TENDER OFFER STATEMENT AND OTHER DOCUMENTS THAT ARE FILED BY IEP UTLITY HOLDINGS LLC WITH THE SEC WILL BE MADE AVAILABLE TO ALL STOCKHOLDERS OF SWX FREE OF CHARGE UPON REQUEST TO THE INFORMATION AGENT FOR THE TENDER OFFER. THE INFORMATION AGENT FOR THE TENDER OFFER WILL BE HARKINS KOVLER, LLC, 3 COLUMBUS CIRCLE, 15TH FLOOR, NEW YORK, NY 10019, TOLL-FREE TELEPHONE: +1 (800) 326-5997, EMAIL: [email protected].
Other Important Disclosure Information
SPECIAL NOTE REGARDING THIS LETTER:
THIS LETTER CONTAINS OUR CURRENT VIEWS ON THE VALUE OF SOUTHWEST GAS SECURITIES AND CERTAIN ACTIONS THAT SOUTHWEST GAS’ BOARD MAY TAKE TO ENHANCE THE VALUE OF ITS SECURITIES. OUR VIEWS ARE BASED ON OUR OWN ANALYSIS OF PUBLICLY AVAILABLE INFORMATION AND ASSUMPTIONS WE BELIEVE TO BE REASONABLE. THERE CAN BE NO ASSURANCE THAT THE INFORMATION WE CONSIDERED AND ANALYZED IS ACCURATE OR COMPLETE. SIMILARLY, THERE CAN BE NO ASSURANCE THAT OUR ASSUMPTIONS ARE CORRECT. SOUTHWEST GAS’ PERFORMANCE AND RESULTS MAY DIFFER MATERIALLY FROM OUR ASSUMPTIONS AND ANALYSIS.
WE HAVE NOT SOUGHT, NOR HAVE WE RECEIVED, PERMISSION FROM ANY THIRD-PARTY TO INCLUDE THEIR INFORMATION IN THIS LETTER. ANY SUCH INFORMATION SHOULD NOT BE VIEWED AS INDICATING THE SUPPORT OF SUCH THIRD PARTY FOR THE VIEWS EXPRESSED HEREIN.
OUR VIEWS AND OUR HOLDINGS COULD CHANGE AT ANY TIME. WE MAY SELL ANY OR ALL OF OUR HOLDINGS OR INCREASE OUR HOLDINGS BY PURCHASING ADDITIONAL SECURITIES. WE MAY TAKE ANY OF THESE OR OTHER ACTIONS REGARDING SOUTHWEST GAS WITHOUT UPDATING THIS LETTER OR PROVIDING ANY NOTICE WHATSOEVER OF ANY SUCH CHANGES (EXCEPT AS OTHERWISE REQUIRED BY LAW).
Certain statements contained in this letter are forward-looking statements including, but not limited to, statements that are predications of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Forward-looking statements are not guarantees of future performance or activities and are subject to many risks and uncertainties. Due to such risks and uncertainties, actual events or results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. Forward-looking statements can be identified by the use of the future tense or other forward-looking words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “should,” “may,” “will,” “objective,” “projection,” “forecast,” “management believes,” “continue,” “strategy,” “position” or the negative of those terms or other variations of them or by comparable terminology.
Important factors that could cause actual results to differ materially from the expectations set forth in this letter include, among other things, the factors identified in Southwest Gas’ public filings. Such forward-looking statements should therefore be construed in light of such factors, and we are under no obligation, and expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.