Tags: Icahn | buy | CVR | Energy

Icahn Offers to Buy CVR Energy in at Least $2.6 Billion Deal

Thursday, 16 Feb 2012 03:25 PM

Carl Icahn offered to pay $30 a share in cash for CVR Energy Inc. and give stockholders the right to collect an additional $7 a share if any other bidder tries to buy the oil-refining company.

Icahn, CVR’s largest shareholder with 14.5 percent of the shares, said the company is worth at least $37 a share, a 34 percent premium to yesterday’s closing price, according to a statement today. The deal would value CVR at a minimum of $2.6 billion, based on a $30-a-share price for all outstanding shares.

The billionaire investor said three days ago that the company’s management wasn’t doing enough to increase shareholder value and Sugar Land, Texas-based CVR should put itself up for sale. Western Refining Inc., HollyFrontier Corp., Tesoro Corp., Valero Energy Corp., Marathon Petroleum Corp. or ConocoPhillips may be potential buyers for CVR, Icahn said.

“My only concern is his ability to convince these companies mentioned to pay $37 a share for this company in this market given their weak balance sheets,” Eliecer Palacios, an energy sector specialist at Maxim Group LLC, said in a telephone interview today. “Refining is a very tight club of people and they all know each other. They all know where the cards are. I don’t think these companies are interested in paying top dollar for these refineries.”

New Board

The company 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.

Icahn also intends to nominate all new board members for the company and remove a so-called poison pill put in place last month to protect the company from unsolicited takeovers, according to the statement.

CVR Chairman and Chief Executive Officer Jack Lipinski didn’t immediately respond to an e-mail seeking comment. Steve Eames, a company spokesman, didn’t immediately return a call or e-mail seeking comment.

CVR rose 5.7 percent to $29.16 at 2:40 p.m. in New York. The shares earlier rose as much as 9 percent.

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2012-25-16
Thursday, 16 Feb 2012 03:25 PM
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