Carl Icahn on Tuesday introduced a sizeable stake in Southwest Gasoline, and the activist investor is pushing the Las Vegas-based utility company to drop its rumored acquisition of pure gasoline company Questar Pipeline.
“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 administrators made public Tuesday. “The purchase will result in serious diminution of shareholder value.”
Shares of Southwest climbed greater than 7% in afternoon buying and selling Tuesday. In his letter, Icahn added the gasoline company did not reply to his inquiry on this matter.
Southwest did not instantly reply to CNBC’s request for remark.
Icahn’s letter got here after Reuters reported that Southwest is in superior talks to purchase Questar, Dominion Power’s transportation and storage enterprise.
Warren Buffett’s Berkshire Hathaway was going after Questar final 12 months, however the deal was terminated in July due to “ongoing uncertainty associated with achieving clearance from the Federal Trade Commission.”
Within the letter to Southwest’s board, Icahn mentioned he is “extremely disappointed” with administration’s efficiency over the previous few years as “a large shareholder.” He cited a “debilitated relationship with regulators,” runaway bills and a weakened credit score profile.
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