Carl Icahn’s Open Letter To Southwest Gas Stockholders

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Sunny Isles Beach, Florida, November 9, 2021 — Today, Carl C. Icahn released the following open letter to the stockholders of Southwest Gas Holdings Inc (NYSE:SWX).

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Open Letter To Southwest Gas Stockholders


16690 Collins Avenue, Suite PH-1

Sunny Isles Beach, FL 33160

November 9, 2021

To ALL Stockholders of SWX:

The statement issued today by the SWX board in response to our tender offer is almost inexplicable and frankly the height of hypocrisy. At the same time that they’re telling stockholders their stock is worth more than our $75 offer, they’re amazingly also saying they’ve determined to issue up to $1 billion of new stock, equivalent to almost 25% of the current market capitalization, in order to finance an ill-advised acquisition that will provide NO synergies and NO growth! That stock issuance would likely be at a valuation well below the currently depressed market price of $68. In other words, it’s fine for the board, in their infinite wisdom, to sell a block of SWX stock at somewhere below $68, but they’re advising YOU not to sell at $75. What are we missing?

It is patently obvious that if the SWX board truly believed our company was worth more than $75 per share, they wouldn’t be proposing to issue up to 25% of the company at bargain basement prices. Some might even call this gross negligence.

In addition, the board’s claim that our offer is “illusory” and “highly conditional” is equally disingenuous and we believe intentionally misleading. We have taken great pains to eliminate every “boilerplate” condition that appears in almost every tender offer. For example, our offer is NOT conditioned on us obtaining financing, and it is NOT conditioned on no “material adverse effect” having occurred. It is also not conditioned on us conducting any due diligence.

It is interesting that two of the “conditions” the SWX board has focused on in our tender offer are of their own making and solely within their control to eliminate! For example, our condition requiring elimination of the “poison pill,” which the board implemented after we arrived on the scene, could easily be eliminated if they would simply remove the pill. Additionally, our condition requiring waiver of the “dominant stockholder” provision contained in SWX’s charter is necessitated only by the board’s own actions and could easily be eliminated by the board. We believe it is self-evident that the only reason the board will not remove these impediments is to entrench their positions and protect their lucrative cash compensation.

We believe that if the board had any meaningful stock ownership in SWX (they collectively own well under 1% of the company!) they would be reacting very differently to our compelling offer. Ask yourself: Why won’t the SWX board let the SWX stockholders decide for themselves whether they wish to accept our offer?”

Sincerely yours,

Carl C. Icahn