Southwest Gas Holdings Initiates Secondary Offering of Centuri Holdings Stock, Icahn Entities to Purchase Additional Shares

Southwest Gas Holdings has commenced an underwritten secondary public offering of Centuri Holdings common stock, offering 15 million shares with an option to purchase an additional 2.25 million shares. The concurrent private placement with Icahn Partners and Icahn Partners Master Fund LP will purchase 1.5735 million shares at the Offering price. The Offering is expected to close immediately following the private placement, subject to customary closing conditions.

Southwest Gas Holdings, Inc. (SWX) has initiated an underwritten secondary public offering of Centuri Holdings common stock. The offering includes 15 million shares, with an option to purchase an additional 2.25 million shares. Concurrently, a private placement with Icahn Partners and Icahn Partners Master Fund LP will acquire 1.5735 million shares at the offering price. The offering is expected to close immediately following the private placement, subject to customary closing conditions [1].

This transaction is part of Southwest Gas's strategic plan to transform into a pure-play natural gas utility by divesting its 52% stake in Centuri Holdings. The company aims to unlock $470 million in capital, strengthen its balance sheet, and align its operations with its long-term vision [1]. The offering is expected to provide Southwest Gas with the necessary funds to execute its $4.3 billion capital expenditure plan over 2025–2029, focusing on infrastructure expansion and system modernization [1].

Southwest Gas's regulatory environment is also favorable, with recent legislative wins in Nevada and Arizona. In Nevada, Senate Bill 417 allows the company to pursue alternative ratemaking plans, enhancing predictability in revenue streams and reducing regulatory approval volatility. In Arizona, a $50 million capital tracker program provides flexibility for infrastructure upgrades without immediate rate increases [1]. These regulatory changes are expected to support Southwest Gas's earnings stability and growth.

The company's strong liquidity position, with $356 million in cash and over $1 billion in liquidity as of June 30, 2025, further supports its growth initiatives. The divestment of Centuri Holdings will also reduce debt and improve credit metrics, enabling Southwest Gas to pursue capital-intensive projects like the Great Basin Gas Transmission Company's 2028 Expansion Project [1].

For investors, Southwest Gas offers an attractive income and growth play, with a 3.2% dividend yield and a projected 6–8% annualized growth in adjusted net income through 2029 [1]. However, potential risks include the pace of Centuri's divestiture and regulatory headwinds in other states. Southwest Gas's proactive engagement with regulators and focus on low-risk, capital-efficient projects mitigate these concerns.

In conclusion, Southwest Gas Holdings' secondary public offering of Centuri Holdings common stock is a significant step in its transformation into a pure-play natural gas utility. The offering provides the company with the necessary capital to execute its growth strategy and align its operations with its long-term vision. For investors, Southwest Gas offers a compelling case for a stable, growing income stream with downside protection.

References:
[1] https://www.ainvest.com/news/southwest-gas-holdings-unlocking-shareholder-strategic-separation-regulatory-momentum-2508/