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Proxy Advisers divided on EQT's fight with the rice brothers



The two most influential proxy advisors reached opposite conclusions as to whether natural gas producer EQT Corp.'s shareholders would surrender control of the company to a couple of brothers who said they could do better.

Proxy Advisor Institutional Shareholder Services Inc. recommended shareholders support all seven nominees of the Rice Brothers and five undisputed company representatives, according to a copy of the ISS report seen by The Wall Street Journal.

At the same time, the competitor recommended Glass Lewis & Co. Shareholders support all 12 of the company's nominees, according to a copy of their report seen by Journal.

EQT faces Toby Rice and Derek Rice-two of the brothers who sold Rice Energy to EQT for about $ 6.7 billion in 201

7 in a proxy battle. The brothers, with their family controlling about 3% of EQT's shares, have become frustrated in their business and are pushing Toby Rice to replace CEO Robert McNally.

EQT said in a statement Friday that it strongly disagrees with ISS's recommendation and the selection of Ricebrothers nominations would be disastrous for EQT's business. The called brothers nominated "less qualified, less experienced and highly conflicting."

Neither the EQT nor the Rice brothers responded immediately to a request for comment on Glass Lewis's report, published late Friday.

The ISS said in the report shows that despite EQT's recently improved performance, cost savings and other possible benefits of the acquisition of Rice Energy has not been met, and the board requires significant change. Glass Lewis, on the other hand, said that such a drastic change is not justified given that EQT has already added eight directors and installed new management in the past year.

Proxy advisers' recommendations may affect how some institutional shareholders vote. 19659002] The Rice brothers nominated include Toby Rice and Daniel Rice, a current member of the EQT Board appearing on both sides of the director shifts. They have support from EQT's shareholders, including D.E. Shaw Group and Kensico Capital Management Corp., which together manage around 8% of EQT's shares, according to Refinitiv.

Over the past few months since British brothers launched their campaign last year, EQT has made a number of steps to improve the positioning of its shareholders, including pushing back the shareholder's date, replacing additional directors and delivering better results.

EQT has said that the Rice brothers' nominees on the board would interfere with the progress of the company and that Toby Rice is not capable of directing the company.

Toby Rice said in a statement that the ISS decision "confirms that the Rice team plan is the only viable way to transform EQT into a modern, low cost gas operator."

EQT uses a universal ballot for its shareholder vote and sets It up as one of the few profiles proxy fights to use such cards, which allows shareholders to choose from both sides nominated. Universal ballot papers may make a company more likely to lose some board seat to a dissident, but less likely to lose the majority of seats.

EQT's shareholders are set to vote on board members on July 10. The company's shares stopped 9.6% higher on Friday.

Write to Cara Lombardo at cara.lombardo@wsj.com

Appears in June 29, 2019, released edition as & # 39; Rice Brothers Gain Clout in EQT Battle. & # 39;


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