EQT Proxy Battle Heats Up as Largest Shareholder Joins Rices

(Bloomberg) -- The dissident group of investors seeking to overhaul the top management and board of EQT Corp. won support from the U.S. natural gas producer’s largest shareholder, boosting its position ahead of the company’s annual meeting next week.

T. Rowe Price Group Inc., which holds a stake of about 10% stake in the largest American gas producer, said on Monday that it will vote to elect the slate of director nominees put forward by the Rice Group. That support comes just four days after Kensico Capital Management Corp., another large shareholder, backed the group led by brothers Toby and Derek Rice.

The Rices have called for drastic changes at the Pittsburgh-based driller, contending that EQT has underperformed peers since buying Rice Energy Inc. in 2017, the company their family founded. The brothers want Toby Rice to take over as chief executive officer. EQT says most of the Rices’s demand are too extreme and the company is already undergoing significant changes.

“We have long been admirers of the founders and leaders of Rice Energy,” David J. Wallack, portfolio manager for the T. Rowe Price Mid-Cap Value Fund, said in a statement. “This magnitude of change for the EQT board is appropriate and necessary.”

T. Rowe Price and Kensico follow Elliott Management Corp. and D.E. Shaw Group, which have also thrown their weight behind the brothers, giving the dissident group the support of at least a fifth of shareholders, who are set to vote at the annual meeting on July 10.

“EQT believes shareholders should question the merit of a 3% shareholder seeking to be CEO and replace management and a majority of the board,” the company said in separate statement Monday, referring to the Rice group’s holding.

Shareholder advisory firm Institutional Shareholder Services Inc. on Friday urged EQT shareholders to support the Rices, while Glass Lewis & Co., another advisory firm, said the company is headed in the right direction after changes to management and the board in recent months.

Shares of the company extended gains on Monday, rising 1.6% as of 10:16 a.m. in New York, after jumping 9.6% in the previous session following the ISS decision.

To contact the reporters on this story: Simon Casey in New York at scasey4@bloomberg.net;Ryan Collins in Houston at rcollins74@bloomberg.net

To contact the editors responsible for this story: Tina Davis at tinadavis@bloomberg.net, Pratish Narayanan, Joe Carroll

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