D.E. Shaw Group says 'disappointed' in EQT's management, supports Rice team
D. E. Shaw & Co. sent a letter to the Board of Directors of EQT expressing its support for the Rice Team and its concerns regarding recent statements made and actions taken by EQT. The letter read, in part: "I am writing to you on behalf of certain investment funds advised by D. E. Shaw & Co., L.P. We have been shareholders of EQT Corporation for over three years and today own over 4.5% of the Company, because we believe in the significant potential of the asset base. Like many shareholders, we have been disappointed in the current management's poor execution and are excited about the prospect of Toby Rice and the Rice Team returning to lead the Company and deliver the performance improvements shareholders deserve. We support the Rice Team because they are seasoned operators with a proven track record of delivering peer-leading results on the exact assets that EQT owns today. Our sentiment appears to be widely held among shareholders; Tudor Pickering Holt & Co. recently wrote that there was "near unanimous support for the Rice Proposal"1 and EQT's former CEO publicly stated that he "agree[s] fully with the Rice plan" and that "[...] Toby Rice is a true operator and the best person to help the company capture the full value of the asset base." We hope the Board will engage constructively with the Rice Team and reach a resolution. Unfortunately, management's January 7th letter announcing a "New EQT" is little more than an announcement of layoffs. Despite using the word "new" fourteen times in the letter, the truth is that all management positions are filled by legacy EQT employees who have been promoted to their respective roles despite bearing responsibility for the execution mishaps to date and the Chairman of EQT has been on the Board for 23 years...We are also concerned that the Company is laying off over 100 employees without first receiving input from the Rice Team. Given what has occurred to date and the context of the ongoing discussion between the Company and the Rice Team, we believe it is only appropriate that EQT refrains from making any other decisions regarding future strategy until a resolution is reached with the Rice Team. If a constructive resolution isn't reached swiftly, then the answer is simple: let shareholders vote. For decades, EQT has held its annual meeting in April. It was only moved to June last year to allow shareholders time to hear the results of the committee findings on whether the company would spin off its midstream business. The meeting should be held in April this year as it traditionally has been - especially given the urgent matters facing the Company. We continue to believe in the potential of EQT. But all of the Company's stakeholders deserve better."