Southwest Gas Adopts Poison Pill as Icahn Opposes Questar Deal

(Bloomberg) — Southwest Gas Holdings Inc. adopted a so-called poison pill plan in a bid to stop billionaire activist investor Carl Icahn taking a larger stake in the U.S. power utility as he opposes its plan to buy a pipeline operator.

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Southwest is pursuing its acquisition of Questar Pipelines from Dominion Energy Inc. for about $2 billion despite Icahn’s public comments last week that the deal was too costly. Hours before the purchase was publicly announced, Icahn disclosed a 4.9% stake in Southwest and said he would move to block the transaction by running his own slate of directors.

Southwest will issue one right to a share that will initially trade with each existing share as of Oct. 21, it said in an statement Monday. The rights will be exercisable if anyone acquires at least 10% of the outstanding stock, entitling all holders to buy additional shares at a discount of 50% to the market price.

“The rights plan is designed to protect stockholder interests by reducing the likelihood that any person or group would gain control of Southwest Gas Holdings through the open-market accumulation of the company’s shares,” Southwest said in the statement.