JANA Partners' 2017 letter to EQT stockholders opposing the Rice acquisition
- Written by
- Barry Rosenstein
- Organisation
- JANA Partners
- Filed
- 16 Oct 2017
- Sector
- Natural gas production
Read the original at sec.gov (opens in a new tab)
This is the view as filed on 16 Oct 2017, not a statement of what the author thinks today.
About this letter
Barry Rosenstein, managing partner of JANA Partners, signed this letter to his fellow EQT stockholders in October 2017, when JANA owned approximately 6% of EQT's outstanding shares. It was filed with the SEC as definitive additional proxy material, after JANA filed its definitive proxy statement on 13 October 2017 for a special meeting of EQT shareholders.
This was not a contest for board seats. EQT had agreed to acquire Rice Energy, and the deal needed EQT stockholders to approve the issuance of new EQT shares to Rice stockholders. JANA asked them to vote against that issuance on its GOLD proxy card. The letter is short and built as a set of headed arguments covering the information EQT had published, the claimed financial benefits, management incentives and the effect on future value creation, before closing with voting instructions.
Why read it
A clear model of how a shareholder tests merger synergies against the premium paid, and of why the currency used to pay for a deal matters as much as its strategic logic.
What to notice
- 1
The core arithmetic: JANA puts the synergies reaching EQT shareholders at only about $600 million, against an acquisition premium of $1.8 billion, roughly three times what it believes the deal would actually create.
Continue the investment thesis
See the 3 remaining takeaways on what this investor is arguing and why, and every analysis across the Letters & Theses library.
Checking what you can open…
Companies discussed
- EQT Corporation (EQT)
- Rice Energy
Topics
- capital allocation
- valuation
- governance
- valuation discount
- risk
L3VLUP does not host this document. It belongs to JANA Partners and is a public SEC filing; the notes above are L3VLUP’s reading of it.
The same argument, elsewhere
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