M&A

The guy who runs the investment firm Jana Partners, Barry Rosenstein, is a corporate raider. He invests millions in a company he’s targeted in order to get one or two people elected to the board of directors. Those people then agitate and force the company to lay off hundreds or thousands of employees, and sell off assets, in a bid to make the stock price jump. When the price does jump, corporate raiders like Rosenstein then sell their shares, making a profit on the new/higher price (buy low sell high). It may be legal, but we consider it immoral. In June, EQT, one of the biggest drillers in the Marcellus/Utica, announced a deal to buyout and merge in Rice Energy, another sizable M-U driller (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). A few weeks later Jana targeted EQT in an attempt to stop the deal (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Jana believes it could make a whole lot more money if the deal doesn’t go through, and instead if EQT splits itself in two–one half a drilling company, the other half a pipeline company (firing a bunch of people along the way). So Jana went on a smear campaign, making all sorts of wild accusations against EQT, including calling EQT management’s compensation structure “perverse,” and accusing the company of using “deceptive” maps of EQT and Rice acreage positions (see Corp Raider Continues to Trash Talk EQT/Rice Merger, Vote Set Nov 9). All the trash-talking and bullying didn’t worked. The deal will happen–this week–and Jana is now officially throwing in the towel. They will still vote against the deal with their shares, but they have withdrawn their proxy fight to enlist enough other shares to vote down the deal…
Read More “Corp Raider Jana Partners Admits Defeat Ahead of EQT/Rice Vote”

The disgusting corporate raiders at Jana Partners are fighting to the bitter end in their attempt to stop the merger/takeover of Rice Energy by 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). Jana is the same company that recently helped Amazon in its hostile takeover of grocery company Whole Foods. Unfortunately (for Jana), their strategy isn’t working this time around. Over the past few weeks Jana has sent a couple of nasty letters to EQT’s board, making some rather wild claims. The tone of Jana’s communication is becoming more shrill as time goes on, as desperation sets in and a vote by EQT shareholders on the deal draws near (Nov. 9). The problem is the financial press picks up on these wild claims and repeats them, so yesterday EQT felt it necessary to (once again) respond and set the record straight–to debunk the lies Jana is spreading about the deal and about EQT’s past performance…
Read More “Corp Raider Continues to Trash Talk EQT/Rice Merger, Vote Set Nov 9”

On Wednesday, EQT announced the company has floated $3 billion (yikes!) of IOUs–called “notes” in the financial industry–with various due dates and interest rates payable, in order to make a cash payment due as part of their purchase of Rice Energy. The total deal is worth $8.2 billion, with EQT paying $6.7 billion and assuming Rice’s existing debt of $1.5 billion (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). This deal is moving ahead, over the objections of two different corporate raiders who own a considerable amount of EQT stock (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal and Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.). In addition to raising $3 billion in cash from IOUs, EQT is also tapping into its line of credit and the money it has socked away in its checking account to get this deal done…
Read More “EQT Raises $3B in IOUs as Down Payment for Rice Energy Purchase”

A second corporate raider is now making trouble for EQT and its planned purchase of/merger with with Rice Energy. 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 after the announced merger, 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 Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Instead of buying Rice, Jana is demanding that EQT split itself into two companies–upstream (drilling) and midstream (pipelines). Jana is now joined by a second group, a group that holds 4% of EQT’s outstanding stock–D.E. Shaw Group. Shaw is headed up by former Elliott Management head and corporate raider Quentin Koffey. As a reminder, raiders buy enough stock to get themselves a seat or two on the board of directors, so they can force a company to sell assets and fire people to drive up the price of the stock, lining their pockets because the raiders then sell the stock after the price goes up, moving on to the next target. Disgusting. And now Shaw, perhaps in league with Jana, is ganging up on EQT. So it’s no surprise that EQT has had to respond by issuing a statement that they’ve “accelerated” the timeline to explore the issue both Jana and Shaw are demanding–that the company split itself in two–upstream (drilling) and midstream (pipelines). That will, according to the money-grubbing raiders, “unlock shareholder value” (i.e. make them rich). Below we have EQT’s announcement, which came a day before Shaw sent the company a letter and a presentation (also below) that supposedly outlines how splitting EQT in two is best for everyone. At least Shaw is not demanding EQT pull out of the Rice Energy deal, as Jana is doing…
Read More “Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.”

Corporate raiders buy just enough shares of stock in a company so they can put one or two members on the board of directors and control the company. Once a raider gains control, he fires a bunch of people, sells a bunch of assets, declares the company “healthier” and the stock price goes up. Once the stock price jumps, the raider then sells his shares at a profit and moves on to the next victim. That’s how disgusting, PERVERSE corporate raiders work. So imagine our outrage at reading comments by corporate raider Barry Rosenstein, of JANA Partners, who is trying to stop the merger/buyout of Rice Energy by EQT. Rosenstein calls the deal “perverse,” nothing more than a way for corporate executives to boost their own salaries. Kind of like the pot calling the kettle black, don’t you think?…
Read More “Perverse Corporate Raider Calls EQT Plan to Buy Rice “Perverse””