Former Rice Energy executives Toby and Derek Rice have scaled back their nominees to replace US shale gas giant EQT’s board, offering up seven candidates instead of nine in an ongoing proxy battle set to conclude at a July shareholder meeting, writes Julia Martinez.

The move follows EQT’s announcement that three of its directors would retire, handing the company an opportunity to propose three new independent directors.

The Rice team said it believes Janet Carrig and James McManus II are qualified for the board, and subsequently removed two of its own nominees from the slate.

Carrig served at ConocoPhillips for almost a decade, while McManus was chief executive of Permian shale player Diamondback Energy before its $9.2 billion sale to Energen in 2018.

“While we are pleased EQT has replaced three long-tenured directors, including its chairman, and has added two qualified director nominees to its slate that we can support, we continue to believe that substantial board change is required to achieve the fundamental improvements needed at EQT,” the Rices said in a statement.

“If our seven nominees are elected, we believe the board will have the right mix of expertise, experience and continuity to achieve the performance all shareholders deserve.”

Since last year, the Appalachia-focused company has been going head-to-head with brothers Toby and Derek, who have said the company’s poor performance after a $6.7 billion acquisition of Rice Energy in 2017 calls for a board takeover.

That takeover includes installing Toby as chief executive, and recommending seven directors to the 12-person board. Those seven, with Toby and incumbent brother Daniel, are Lydia Beebe, Lee Canaan, Kathryn Jackson, John McCartney and Hallie Vanderhider.

The Rice team collectively hold around a 3% stake in EQT, and have gained the support of shareholders DE Shaw and Elliott Management.

However, the company has come out against the Rice nominees, reiterating that their slate is composed of former associates and friends of the Rices who “would immediately jeopardise shareholder value by destabilising EQT’s continuing success in driving operational efficiencies and reducing costs”.

“In fact, we believe the Rice family’s campaign is singularly designed to install Toby as chief executive and his friends and family on the EQT board and management team, and pursue risky and potentially value-destructive ideas in lieu of the company’s proven strategy,” EQT said in a statement.

“We do not believe the board should be a friends-and-family club, and it is not in the best interests of all shareholders for EQT to become a family business.”

The shareholder meeting is set for 10 July.

Weekly

Rice brothers revise list of EQT board candidates to seven