Dec. 19 (Bloomberg) -- Commercial Metals Co. urged investors to turn down an $1.73 billion tender offer from billionaire investor Carl Icahn because it undervalues the steel producer.
“The CMC Board firmly believes that the continued pursuit of the company’s strategy will deliver far greater value for CMC’s stockholders than Mr. Icahn’s offer,” Anthony Massaro, Commercial Metals’ lead director, said in a statement today.
Commercial Metals, based in Irving, Texas, also reported first-quarter earnings will be 87 to 97 cents per share after deducting costs related to closing the company’s Croatian pipe mill. Commercial Metals’ expected profit compares with the 12- cent average of 10 analysts surveyed by Bloomberg.
Icahn said Dec. 9 that his tender offer needs support from at least 40.1 percent of Commerical Metals’ shareholders to succeed. That would give Icahn a majority when combined with his current stake of about 10 percent, New York-based Icahn Enterprises LP said.
Icahn asked the board to lift a restriction that limits his holdings to 10 percent. Icahn said he would go to court if the board failed to do so. Icahn Enterprises previously offered to buy Commercial Metals in a Nov. 28 letter to the company’s directors.
Icahn said he would sell “non-core” assets, appoint new management and combine Commercial Metals with his existing metals-recycling assets.
Commercial Metals is being advised by Goldman Sachs Group Inc. and law firm Sidley Austin LLP.
--Editors: Jessica Resnick-Ault, Steven Frank
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