National Fuel Gas Co. has blocked investor Mario Gabelli's bid to gain a seat on the Amherst energy company's board of directors.
The company, citing comments that Gabelli made regarding his failed bid two years ago to have National Fuel spin off its utility business, said it would not include the investor's nominee for a board seat in its upcoming shareholder election.
The reason: Gabelli is seeking a board seat with "the intent to change or influence control of the company," which National Fuel said runs contrary to its bylaws that bars investors from nominating directors if they want to influence the way the company is run.
Gabelli's company, Gamco Asset Management, is National Fuel's second-biggest individual investor, owning 7.8 percent of the company's stock, down from 9.1 percent in January. The Vanguard mutual fund company is National Fuel's largest shareholder, owning a 10.6 percent stake.
Gabelli two years ago had sought the spin-off of National Fuel's utility business, arguing that the company’s share price was being depressed because it mixes the lower-risk utility business with a much chancier but faster-growing oil and natural gas drilling operation, as well as a growing pipeline business.
National Fuel, on the other hand, contended that the diverse mix of businesses made its operations less volatile and helped it maintain an investment-grade credit rating that reduced its borrowing costs for its growing pipeline and drilling businesses. Shareholders rejected the spin-off plan by a more than 4-t0-1 margin.