(Corrects description of contingent right in penultimate paragraph of story published April 3.)
Billionaire investor Carl Icahn said more than half of CVR Energy Inc. (CVI:US)’s shares were tendered in response to his unsolicited $2.6 billion offer, setting up a proxy fight at the refining company’s next annual meeting.
Holders of about 55 percent of CVR stock agreed to the $30- a-share offer, which would give Icahn a 69 percent stake in the company, he said in a statement today. Icahn won’t be able to immediately buy the shares because of a shareholder rights plan put in place by the company’s board in January.
Icahn, the largest (CVI:US) CVR shareholder, previously said that if he gains control he would put the company, which he says is undervalued, up for sale. With majority control, he would seek to replace the CVR board through a shareholder vote at the annual meeting next month.
“Now that there is a clear mandate in favor of my offer, it is your duty to carry out the wishes of shareholders as quickly as possible,” Icahn told board members in a statement today. He said the CVR board should move its annual meeting forward to this month and allow him to buy the remainder of the company.
CVR said Icahn can’t buy the shares now, because of a restriction that limits individuals from acquiring the company without board approval. The shares tendered can be withdrawn at any time, CVR said in a statement today.
The test of Icahn’s support will come at the shareholder meeting. Shareholders will chose “whether to elect Mr. Icahn’s hand-picked nominees in place of our qualified and experienced board of directors with their track record of delivering value,” the company said.
CVR, based in Sugar Land, Texas, owns refineries in Coffeyville, Kansas, and Wynnewood, Oklahoma, capable of processing a combined 185,000 barrels a day. It also owns a majority interest in CVR Partners LP, which produces fertilizer.
The company has benefited from an oversupply of crude in the U.S. Midwest that has depressed prices for the oil it uses to feed its two refineries.
Valero Energy Corp. (VLO:US), ConocoPhillips (COP:US), Marathon Petroleum Corp. or other refiners might be interested in buying CVR, Icahn said in February. He acknowledged in March that “a sale will not be easy” after contacting prospective buyers.
Icahn, who owns 14.5 percent of CVR, announced his intention in February to buy the Sugar Land, Texas-based company’s remaining shares. The Icahn bid includes an additional shareholder payment if the company is sold, an amount he previously estimated at $7 a share. Based on the $30-a-share bid, the proposal values the company at $2.6 billion.
CVR gained (CVI:US) 5.9 percent to $28.80 at the close in New York. Before today, the shares had climbed 22 percent since Jan. 13, when Icahn’s stake in the company was disclosed.
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