Southwest Gas secures court injunction on Icahn's board replacement meeting
Southwest Gas said on April 5 that Delaware's court of chancery granted a summary judgment in its favour regarding a proposal from activist investor Carl Icahn to hold a special meeting with a view to replacing its board.
The summary judgement was filed during a lawsuit brought by Icahn Partners, a conglomerate majority owned by Icahn, and its fundraising scheme Icahn Partners Master Fund. Icahn hopes to secure a short-term restraining order that would prohibit Southwest Gas from selling shares below the price set by his unsolicited acquisition bid. The order would also mean Southwest Gas would be unable to sell additional shares to investors supportive of the existing ownership to stop the acquisition going ahead, according to Harvard Law School.
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"We are pleased that the court granted the company's motion regarding Mr. Icahn's improper proposal to call a special meeting in an attempt to hold an illegal and improper second election for directors," the company said. "The Southwest Gas annual meeting remains the proper venue for stockholders to elect directors."
Carl Icahn is in the midst of a second takeover bid for Southwest Gas, having offered $82.50/share after his initial $75/share proposal was rejected. There is little love lost between him and Southwest's current board of directors, who Icahn believes acted rashly in signing off on a $2bn cheque to acquire local midstream asset operator Questar Pipelines. The Southwest Gas press statement indicates he has tried to throw out the existing board once already. The company responded by adopting a short-term shareholder rights plan, and later appointed two new board directors.