Lee Clifford filling in for Sheryl today as she travels to NYC.

On the menu of phone calls an executive most dreads, one from Carl Icahn has to be near the top of the list.

But that’s exactly what happed to the CEO of Southwest Gas Holdings last fall. As Shawn Tully writes for Fortune:

It was a Sunday, early in October, and Icahn had slowly been building up a stake in Las Vegas utility Southwest Gas Holdings, quietly amassing around 5% of the company. Icahn correctly believed that the market was giving Southwest’s stock zero value for the excellent Centuri energy construction unit. Icahn hadn’t pounced yet, but he was poised to start pressuring Southwest to sell Centuri and greatly improve operations at its core utility.

Instead, on Oct. 3, a bombshell leak revealed that Southwest was planning another big acquisition, in yet another business. Southwest had reached a deal to purchase Questar Pipeline from Dominion Energy for around $1.55 billion in cash, a price 20% higher than Warren Buffett had agreed to pay before abandoning the deal months earlier.

Till that day in October, Icahn had never spoken to Southwest CEO John Hester, and the company was apparently unaware that the legendary activist was amassing a position. So appalled was Icahn that he raced to stop the deal before an official announcement. As Icahn told me, “I kept calling Hester’s office for three days, and his assistant kept saying, ‘He’s out to lunch.’

“I said to her, ‘You’re so right about that, he sure is out to lunch.’”

Over a series of interviews, Icahn recounts to Tully in great detail his battle to take over the utility, stop the acquisition, push to spinoff a fast-growing division, as well as the “tools, tricks, strategies, and maneuvers that have made him arguably the most renowned, and feared, corporate activist on Wall Street.”

It’s a fascinating and illuminating tale, demonstrating “a unique perspective on this highly contentious corner of capitalism, where a lone investor lobs verbal hand grenades while simultaneously proffering a vision of a more profitable future to shareholders. The target company must skillfully play defense, while also trying to outflank the aggressor.” Currently Icahn owns a 4.8% stake in the company and has launched a tender offer at $82.50 per share. Investors have tendered around 20% of their shares so far, but this battle is far from over—Southwest will release the proxy results at the annual meeting on May 12. In the meantime, you can read Tully’s full story here.

And if your phone is ringing and Icahn’s on the other end—better not be out to lunch.

See you tomorrow.

Big deal

Boston Consulting Group's (BCG) latest digital transformation report, The Five Digital Building Blocks of a Corporate Sustainability Agenda, is based on a survey of more than 850 companies worldwide. The survey found that organizations successful in digital transformation (23%) are almost twice as likely to support ESG as a digital initiative than companies with an unsuccessful transformation (13%). Successful transformers look beyond the challenges of process. They focus on how new capabilities will help the company reach its goals, according to the report. BCG also noted that transformation leaders merge their digital and sustainability agendas.  

Going deeper

KPMG's CFO Peer Exchange Highlights is a new report based on the firm's discussion with a cross-industry group of finance chiefs about the impacts of the Russia-Ukraine war, cyber threats, and continuing concerns about inflation in the U.S. economy.

Leaderboard

Mark Murphy was named EVP and CFO at Micron Technology, Inc. (Nasdaq: MU), effective April 18. Murphy brings 25 years of deep financial and operational leadership to the role.
Murphy will be joining Micron from Qorvo, a wireless technology company where he has been CFO since 2016. Prior to his tenure at Qorvo, Murphy held multiple finance and operations leadership positions, including CFO at Delphi Automotive, CFO at MEMC Electronic Materials, and president of the Electronics Materials division at Praxair.

William White was named CFO of MCR, a hotel owner and operator. White joined MCR in January 2016, serving as a SVP of acquisitions and development. In his new role, White will lead MCR’s finance function, including accounting, fund administration, tax, treasury and human resources.

Overheard

“We believe there are many uses where a blockchain can replace or improve contracts, data ownership, and other enhancements.”

—JPMorgan Chase CEO Jamie Dimon mentioned blockchain in his annual shareholder letter. Dimon may not be a fan of crypto, but he does see value in the technology that underpins it, Fortune reported.