Southwest Gas settles board battle with Icahn, replaces CEO

Billionaire activist-investor Carl Icahn gives an interview on Fox Business Network’s Neil Cavuto show in New York, U.S., February 11, 2014. REUTERS/Brendan McDermid/File Photo

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NEW YORK, May 6 (Reuters) – Southwest Gas Holdings (SWX.N) reached an agreement on Friday with Carl Icahn who will replace the company’s chief executive and cede up to four board seats to the billionaire investor .

The settlement ends a months-long battle that Icahn started with the Las Vegas, Nevada-based company in October as it pursued its plan to buy Questar Pipelines for about $2 billion.

Southwest Gas said it promoted Karen Haller to CEO and president, replacing John Hester immediately. Icahn said in a statement that no deal would have been reached without Hester leaving the company.

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“We are confident that she is the right leader for the future of Southwest Gas,” Board Chairman Michael Melarkey said in a statement about Haller.

Icahn will be allowed to appoint at least three directors after next week’s annual meeting. The company said a fourth director would join the board if the board decides not to spin off infrastructure services company Centuri, a move the company announced in March.

Southwest Gas said it would make a decision on the Centuri spin-off within 90 days of the deal.

Icahn, saying buying Questar would hurt shareholders, had sought to gain control of the board by trying to replace 10 directors and pushing for the ousting of the CEO. He called Hester and her management team a “great responsibility” for the company.

The board will have 11 directors, including 10 independent directors after the company’s annual meeting on Thursday.

Icahn, 86, has spent a career tangling with corporations and traditionally asks for a few board seats when he thinks corporations should be run better. He often settles with the company, then retires when his selected administrators become involved in operations.

Icahn said in a statement Friday that he rarely felt the need to oust a CEO, but when such a move was necessary, it “almost always dramatically increases value for ALL shareholders.” Icahn even offered to buy the company for $82.50 per share.

Last month, Southwest said it would consider selling itself, among other alternatives, after an unnamed potential buyer expressed interest in buying the company at a “far higher” price than Icahn’s offer.

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Reporting by Svea Herbst-Bayliss; Editing by William Mallard

Our standards: The Thomson Reuters Trust Principles.

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