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Carl Icahn speaking at Delivering Alpha in New York on Sept. 13, 2016.
David A. Grogan | CNBC

Carl Icahn on Tuesday announced a sizeable stake in Southwest Gas, and the activist investor is pushing the Las Vegas-based utility company to drop its rumored acquisition of natural gas company Questar Pipeline.

“During the past few years, management of SWX has made a number of egregious errors at the expense of shareholders. However, the purchase of Questar you are currently being rumored to make at the price you are willing to pay will make all past errors pale in comparison,” Icahn wrote in a letter to Southwest’s board of directors made public on Tuesday. “The purchase will result in serious diminution of shareholder value.”

Shares of Southwest climbed more than 5% in midday trading Tuesday. In his letter, Icahn added that the gas company didn’t respond to his inquiry on this matter.

Southwest didn’t immediately respond to CNBC’s request for comment.

Icahn’s letter came after Reuters reported that Southwest is in advanced talks to buy Questar, Dominion Energy’s transportation and storage business.

Warren Buffett’s Berkshire Hathaway was going after Questar last year, but the deal was terminated in July due to “ongoing uncertainty associated with achieving clearance from the Federal Trade Commission.”

In the letter to Southwest’s board, Icahn said he’s “extremely disappointed” with management’s performance over the past few years as “a large shareholder.” He cited a “debilitated relationship with regulators,” runaway expenses and weakened credit profile.

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