Rice Energy Declines

Rice Energy declined Monday, sinking as much as 7.5% to a session low of $24.65 a share, after Jana Partners today revealed a 5.8% stake in its prospective merger partner EQT Corp (EQT) and began efforts to scuttle the $6.7 billion tie-up of oil and natural gas producers. Jana has been amassing a EQT stake since late April and now owns over 8.25 million of the company’s shares as well as options to acquire another 1.86 million shares, which would increase its holdings to slightly more than 10.1 million shares, or about 5.8% of its outstanding stock.

According to a regulatory filing from Monday morning, Jana said it opposes the proposed transaction because it believes the $26.60-per-share buyout price – consisting of $5.30 in cash plus 0.37 of a EQT share for each Rice share – is too high. It also questions the stated benefits of the deal and would instead have EQT to fully split off its pipeline operations into a pair of related companies, EQT Midstream Partners (EQM) and EQT GP Holdings (EQGP), with the goal of making EQT a pure exploration and production company.

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