(Bloomberg) -- Billionaire investor Carl Icahn criticized Southwest Gas Holdings Inc.’s plans to spin off a construction business in a letter warning investors not to be fooled by the latest move from the U.S. utility’s top executive.
“The vague promise to separate Centuri is not necessarily a step in the right direction nor is it something he ever wanted to do,” Icahn said in an an open letter published Monday on his website. “It is simply a desperate measure to somehow block our tender offer.”
Southwest Gas said Monday it will move forward with its plan to complete the separation of Centuri within nine to 12 months, according to a statement. Shares rose 0.7% to $74.17 at 2:31 p.m. in New York after earlier falling as much as 0.8%.
Icahn also bashed Southwest Gas Chief Executive Officer John Hester for refusing his $4.2 billion bid to take over the utility. Icahn has been locked in a public battle with Southwest Gas since October, when the company defied his objections and moved forward with plans to buy Questar Pipelines from Dominion Energy Inc. for about $2 billion.
The board of Southwest Gas has unanimously rejected Icahn’s offer to buy remaining shares at $75 each, arguing it unders the company and isn’t in the best interest of shareholders. Icahn owns about 5% of Southwest Gas shares.
Southwest Gas said last week that its board approved a plan to make its Centuri Group unit a separate company. The decision came four months after Icahn called on the Las Vegas-based company to sell the business, saying the move would improve its balance sheet.
Spinning off the construction unit will sharpen Southwest Gas’s focus on its regulated natural gas business, the company said in its statement. Details will be disclosed once the plan is finalized, the utility said.
Separating Southwest Gas’s regulated natural-gas operation and the Centuri unit may unlock $1 billion in shareholder , according to Bloomberg Intelligence.
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