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Icahn claims majority CVR shareholder backing

by Lou Whiteman | Published April 3, 2012 at 11:51 AM

Carl Icahn won a key victory in his battle to take over CVR Energy Inc., announcing that about 55% of shares outstanding had tendered in favor of his $2.26 billion offer for the petroleum refiner.

The investor put Sugar Land, Texas-based CVR in play earlier this year with an offer of $30 per share, and also pledged to provide shareholders with a contingent value right that would give current investors a gain should he flip the company within nine months. CVR rejected the offer as "inadequate," and the two sides have been fighting an increasingly testy battle of late for control of the company.

Shares of CVR opened Tuesday up 4.49%, or $1.22, to $28.42.

Icahn has pressed his tender despite CVR's poison pill that prohibits him from adding to his 14.54% stake in the company. The investor has nominated a slate of directors to be considered at the company's annual meeting, which is scheduled for mid-May.

In the statement announcing the tender results, Icahn pressured CVR to push its annual meeting up to the end of April.

"Given the overwhelming support for our tender offer, in my opinion the best way to 'deliver superior stockholder value' is to move to install the nominees as board members on an expedited basis so that they may remove the poison pill and allow shareholders to receive their offer consideration as quickly as possible," Icahn said.

"If the board insists on frustrating the will of a supermajority of its shareholders, we will move to the next phase of our campaign -- the proxy fight."

In response, CVR highlighted the nonbinding nature of the tender, and seconded Icahn's suggestion that the important battle was still to come.

"The real choice for stockholders will be at our annual meeting, where they will decide 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.

Icahn has been critical of what he calls CVR's "PR machine," writing a series of letters to shareholders arguing that CVR is too small to capitalize on growing demand for refined petroleum products and criticizing management. In his letter Tuesday he tried to address concerns that he is not interested in consummating the transaction, saying "I stand ready, willing and able to pay $2.26 billion to purchase all CVR shares that I don't currently own as soon as the board permits me to do so."

The tender success reverses a string of recent setbacks for Icahn. The activist investor failed to gain traction with shareholders of Clorox Co., Commercial Metals Co. and Oshkosh Corp. in efforts to force those companies to seek buyers.

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Tags: Carl Icahn | CVR Energy Inc. | energy | M&A

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Icahn claims majority CVR shareholder backing

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