Southwest Gas to sell MountainWest business for $1.07 bln, spin off Centuri
Dec 15 (Reuters) - Southwest Gas Holdings Inc will sell its MountainWest Pipelines business to Williams Companies Inc for $1.07 billion, on the heels of a months-long proxy battle with activist investor Carl Icahn that reached a settlement in May.
Las Vegas, Nevada-based Southwest also confirmed on Thursday it will spin off Centuri, its utility infrastructure services business, as a standalone, independent company, a decision it first announced in March.
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Southwest had bought MountainWest, formerly known as Questar Pipelines, from Dominion Energy for nearly $2 billion including debt last year. The purchase had sparked a battle between Icahn and Southwest that eventually settled with the ousting of former chief executive John Hester and three board seats being awarded to Icahn-appointed directors in May.
The activist investor had said the Questar deal hurts shareholders and referred to Hester and his management team as "a great liability".
Southwest said on Thursday it plans to begin making necessary filings in the first quarter of 2023 to go ahead with the Centuri spin-off and expects the separation to take about a year.
It will use proceeds from the MountainWest sale, expected to close next year, to pay off its term loan of about $1.1 billion, and will take an estimated loss of $350 million to $425 million on the sale, net of tax.
Williams will assume $430 million of MountainWest's debt as part of the deal.
MountainWest Pipelines Holding Co operates over 2,000 miles of interstate natural gas pipeline systems mainly across Utah, Wyoming and Colorado, totaling about 8 billion cubic feet (Bcf) per day of transport capacity. The business also holds 56 Bcf of total storage capacity.
(Reporting by Ruhi Soni in Bengaluru; Editing by Vinay Dwivedi and Krishna Chandra Eluri)