Jana Partners appears to be running out of options as it continues to push for major restructuring at EQT Corporation (NYSE:EQT). The New York hedge fund invested in the natural gas company because it believed it could unlock shareholder value, by splitting of the company’s businesses into separate companies.
Jana Partners Spin-Off Push
The hedge fund plan has since received a major setback on EQT Corporation entering into an agreement to acquire Rice Energy Inc.(NYSE:RICE) in a $6.7 billion deal. Jana Partners has since mounted a vigorous campaign as it seeks to block the merger from going through.
Jana Partners believes that the $6.7 billion deal can only go through on EQT Corp first divesting some of its businesses. The stance has not gone well with other investors advisory firms. Glass, Lewis & CO LLC, the second of the two major advisory firms, is urging investors to vote in support of the $6.7 billion acquisition.
“We believe the proposed transaction is strategically compelling and financially acceptable from the perspective of EQT and its shareholders. The combined company would have greater scale with a more attractive asset base and acreage footprint, providing opportunities to achieve meaningful capital efficiencies and operating synergy,” Glass Lewis in a statement.
Institutional Shareholder Services has also issued a report recommending shareholders back the proposed merger. The proxy advisory firm on its part said the deal will deliver meaningful value. The sentiment is a major blow to Jana Partners, which has been pushing for a spinoff of the businesses.
D.E Shaw & Co another large investor in Jana Partners has also issued a presentation criticizing EQT Corp. The investor on its part is pushing for the spinoff of the midstream unit following the merger with Rice.
EQT Corp Stance
In response to the concerns raised by proxy firms and the two largest investors, EQT Corp says it has taken the necessary steps to address the sum of the parts discounts. Shareholders are to be given an opportunity to have a meaningful input on the final decision at a meeting scheduled for November 9, 2017.
Regulatory filings indicate that Jana Partners owned 1.26 million shares of EQT Corporation as of October 2, 2017, the holding represents a 5.9% stake in the company.
