Southwest Gas (NYSE:SWX) Holdings reached a settlement on Friday with Carl Icahn that will replace the company’s chief executive and hand as many as four board seats to the billionaire investor.
The settlement ends a months-long battle Icahn launched with the Las Vegas, Nevada-based company in October as it pushed ahead with plans to buy Questar Pipelines for roughly $2 billion.
Southwest Gas said it promoted Karen Haller to CEO and president, replacing John Hester immediately. Icahn said in a statement that no settlement would have been reached without Hester leaving the company.
“We are confident that she is the right leader for Southwest Gas moving forward,” 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 will join the board if the board decides not to spin off infrastructure services company Centuri, a decision the company announced in March.
Southwest Gas said it will make a decision about whether to spin off Centuri within 90 days of the agreement.
Icahn, saying the Questar purchase would hurt shareholders, had sought to take control of the board by trying to replace 10 directors and pushing for the ouster of the CEO. He called Hester and his management team “a great liability” to 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 companies and traditionally asks for a few board seats when he thinks businesses should be run better. He often settles with the company and then steps aside as his selected directors become involved in operations.
On Friday Icahn said in a statement that he has rarely felt the need to oust a CEO but that when such a move was necessary, it “almost always greatly enhanced value for ALL shareholders.” Icahn even offered to buy the company for $82.50 a share.
Last month Southwest said it would consider selling itself, among other alternatives, after an unnamed potential buyer showed interest in buying the company at a price “well in excess” of Icahn’s offer.