Southwest Gas adopts tax-free protection plan for Centuri spin-off

Southwest Gas announced actions to help preserve the company’s ability to effectuate a tax-free separation of Centuri Group as it considers additional separation alternatives to form a new independent publicly traded utility infrastructure services company. The company remains committed to separating Centuri and continues to assess the value of a potential tax-free spin-off of Centuri, either following, or in lieu of, a potential initial public offering by Centuri as well as other transaction alternatives. Southwest Gas is also considering other taxable transaction alternatives that may use the company’s available net operating losses to offset the tax impact in certain cases, including, among other potential structures, a potential sell-down of Centuri shares held by Southwest Gas following an initial public offering of Centuri. The company believes that there is minimal capacity for changes in the ownership of its stock before a 355 Ownership Change could occur. As part of the Plan, the Board declared a dividend of one preferred stock purchase right, which are referred to as “rights,” for each outstanding share of Southwest Gas common stock. The dividend will be payable to holders of record as of the close of business on November 17. The rights will initially trade with Southwest Gas’ common stock and will generally become exercisable if a person or group, without the approval of the Board, acquires 4.9% or more of Southwest Gas’ outstanding common stock. Under the Plan, any person that currently owns 4.9% – or 9.9%, in the case of a passive investor – or more of Southwest Gas’ outstanding common stock may continue to own its shares of common stock but may not acquire any additional shares without triggering the Plan. If the rights become exercisable, all holders of rights will be entitled to purchase Southwest Gas common stock at a 50% discount or Southwest Gas may exchange each right held by such holders for one share of Southwest Gas common stock. Rights held by the triggering person will become null and void and will not be exercisable.