- Company Name
- EQT Corporation
- Stock Symbol
- Class Period
- Purchasers of EQT common stock between June 19, 2017 and October 24, 2018; shareholders of EQT and Rice Energy Inc. who held EQT or Rice shares as of the record dates of September 25, 2017 and September 21, 2017, respectively, and were entitled to vote at an EQT or Rice special meeting on November 9, 2017 with respect to EQT’s acquisition of Rice; and all persons who purchased or otherwise acquired EQT common stock in exchange for their shares of Rice common stock in the acquisition
- Motion Deadline
- August 24, 2019
- Western District of Pennsylvania
The complaint charges EQT and certain of its officers and directors with violations of the Securities Exchange Act of 1934 and Securities Act of 1933. EQT is a natural gas production company with primary operations in the Appalachian Basin and throughout Pennsylvania, West Virginia and Ohio.
On June 19, 2017, EQT announced it had agreed to acquire Rice Energy, Inc., a rival gas producer, in a transaction that valued Rice at $6.7 billion. Under the terms of the agreement, Rice shareholders would receive 0.37 shares of EQT common stock and $5.30 per share in cash for each share of Rice stock they owned, for total consideration of $5.4 billion in EQT stock and $1.3 billion in cash (the “Acquisition”). In connection with the Acquisition, defendants filed a combined registration statement on Form S-4, a prospectus and a joint proxy statement (together, the “Registration Statement”) with the SEC, which the SEC declared effective on October 12, 2017.
The complaint alleges that during the Class Period and in the Registration Statement, defendants falsely stated, among other things, that the Acquisition would yield billions of dollars in synergies based on purported operational benefits. Specifically, on June 19, 2017, when defendants announced the Acquisition, they represented that because Rice had an acreage footprint largely contiguous to EQT’s existing acreage, the Acquisition would allow EQT to achieve “a 50% increase in average lateral [drilling] lengths” (as opposed to more traditional vertical well drilling). EQT claimed that, as a result, the Acquisition would result in $2.5 billion in synergies, including $100 million in cost savings in 2018 alone.
After it closed in November 2017, the Company continued to tout the “significant operational synergies” of the Acquisition. As a result of defendants’ misrepresentations, EQT shares traded at artificially inflated prices throughout the Class Period, with its stock price reaching a high of more than $67 per share.
On March 15, 2018, just five months after the Acquisition closed, EQT announced the sudden and unexpected resignation of its CEO. Then on October 25, 2018, the Company reported poor third-quarter financial results, which it said were caused by an increase in total costs, and disclosed that its estimated capital expenditures for well development in 2018 would increase by $300 million. As a result, the Company announced it was reducing its full-year forecast for 2018. These disclosures caused the price of EQT shares to decline by 13%, dropping from a close of $40.46 per share on October 24, 2018 to $35.34 per share on October 25, 2018.
 Share prices are not adjusted for the effects of the subsequent spin-off of 80% of EQT’s midstream business to EQT’s shareholders on November 13, 2018.