Hedge fund pushes EQT to split after Rice deal
Monday, September 25, 2017
Hedge fund D.E. Shaw & Co LP urged EQT Corp. to split into two parts after it closes its $6.7 billion deal to buy Rice Energy Inc. closes and to speed up efforts to boost its stock price, according to Reuters.
The move is a rare activist stance taken by the $40 billion hedge fund and puts it next to activist fund Jana Partners, which is urging EQT not to go through with the Rice deal.
On Thursday, D.E. Shaw said the deal would be dilutive but seemed to accept the Rice acquisition, demanding that EQT quickly lay out plans to split itself into production and midstream units after it closes. It also said EQT should merge its midstream, or pipeline, business with Rice’s — a move not currently laid out in the terms of the acquisition.
Learn more: Reuters > Hedge fund DE Shaw urges EQT to split after Rice Energy deal
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.