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CVR shareholders back Icahn offer

by Lou Whiteman  |  Published May 7, 2012 at 12:44 PM
Carl Icahn has won his three-month battle with CVR Energy Inc., saying Monday, May 7, that he has secured the support of a majority of shareholders for his $2.6 billion takeover of the oil refiner.

Icahn earlier this year put Sugar Land, Texas-based CVR in play with an offer of $30 per share, with a contingency that would give investors an additional gain should he flip the company within nine months. CVR rejected that offer as inadequate and enacted a poison pill, and the two sides have fought an increasingly testy battle for control of the company.

Facing increasing shareholder pressure, CVR last month signed an agreement with Icahn in which it dropped its poison pill and allowed the investor's tender to proceed. The company remained opposed to the deal, reiterating again last week that its board believed "the company's potential long-term value exceeds the tender offer price."

Shareholders apparently disagreed, with Icahn securing about 63% of the CVR shares he did not already own in the tender. Upon purchase of those shares, which will occur Monday, Icahn and affiliates will own 69% of the company's shares outstanding.

The tender offer continues until May 18, giving additional stockholders time to sell their shares.

Icahn will also replace seven members of CVR's nine-member board as soon as the shares are purchased, in accordance with the terms of last month's agreement.

Icahn has said that upon winning control of CVR he would immediately begin a 60-day auction process, pledging to support any bid of at least $35 per share.

The investor has argued that CVR is better off with a larger partner because small refiners are unable to fully take advantage of the spread between the prices of crude oil and refined products.

CVR owns refineries in Kansas and Oklahoma and is also the majority owner of CVR Partners LP, a fertilizer maker.

Icahn had initially suggested a range of companies including Valero Energy Corp., Western Refining Inc., HollyFrontier Corp., Tesoro Corp. and Marathon Petroleum Corp. as potential buyers, though many analysts expect CVR to instead be sold piecemeal.
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Tags: Carl Icahn | CVR Energy Inc. | CVR Partners LP | HollyFrontier Corp. | Marathon Petroleum Corp. | Tesoro Corp. | Valero Energy Corp. | Western Refining Inc.

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