(Adds details from letter, background)
Sept 14 (Reuters) - Hedge fund D.E. Shaw & Co LP on Thursday urged EQT Corp, which is buying Rice Energy Inc in a $6.7 billion deal, to split into two parts after the deal and to speed up efforts to boost the company's stock price.
The move marks a rare activist stance taken by the $40 billion hedge fund and pits it next to activist fund Jana Partners, which is urging EQT to scrap the Rice deal.
The letter by D.E. Shaw, which said it owns about 4 percent in EQT shares, is signed by portfolio manager Quentin Koffey, who previously worked at Elliott Management, an activist hedge fund known for agitating at energy companies.
In June, EQT said its agreement to buy Rice Energy would create the largest U.S. natural gas producer.
The following month, Jana announced a 5.8 percent in the company and said EQT should scrap the deal and separate its pipeline business instead.
D.E. Shaw on Thursday said the deal would be dilutive but appeared to accept the Rice acquisition, demanding that EQT quickly lay out plans to split itself into production and midstream units after it closes.
The hedge fund also said EQT should merge its midstream, or pipeline, business with Rice's - a move not currently laid out in the terms of the acquisition.
EQT has previously said that after the Rice deal closes, it would address its sum-of-the-parts discount, a sign that the company would entertain the possibility of a break-up. EQT had promised to lay its plan by the end of 2018.
Companies that merge and immediately spin off assets can be subject to U.S. tax penalties.
On Wednesday night, EQT accelerated that timeline, saying that after the deal closes, it will establish a board committee to explore the discount and will make a decision by the first quarter of 2018.
D.E. Shaw also said EQT should appoint board directors with "relevant executive midstream experience."
(Additional reporting by John Benny in Bengaluru; Editing by Anil D'Silva and Paul Simao)