EQT CEO Signals Company Likely to Split in Two After Rice Merger

It looks like all of the agitating and nasty letters and lobbying by corporate raiders has had an effect on EQT. In June, EQT and Rice Energy announced that EQT will buy out and merge in Rice Energy, to create (in EQT) the largest natural gas-producing company in the United States (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). A few weeks later, so-called “activist investor” (i.e. corporate raider) Jana Partners, in league with the Cohen family (Atlas Energy) started a proxy fight to block EQT’s takover/merger with Rice (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). A vote is scheduled for Nov. 9 on the merger deal–expected to pass. From the beginning, Jana has used bullying tactics to try and pressure EQT into abandoning the buyout/merger, and instead split itself into two companies–upstream (i.e. drilling) and midstream (i.e. pipelines). The language thrown around is called “sum of the parts”–as in if EQT splits apart into two separate companies (the parts) the two would be worth more to investors, each company’s stock would preform better, than continuing on as a single company. Other EQT investors, like corporate raider D.E. Shaw Group, have also lobbied for the same split. Under pressure, EQT announced in September that it will move up the timeline to consider such a split (see Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.). Last week EQT issued their third quarter update and held an analyst phone call. In response to a question from an analyst, EQT CEO Steve Schlotterbeck all but said the company will split in two after a special committee formed to explore that option makes it final recommendation…

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