Corporate raider Carl Icahn does not seem to have slowed down with age. Since 1978 he has taken positions in companies with the threat of (and actual) takeovers, in attempts to leverage their market value. In so doing he has scared corporate executives and battled recalcitrant boards.
Icahn recently informed regional refiner CVR Energy (which also controls fertilizer producer CVR Partners) that he intends to make an unsolicited tender offer to acquire all of the outstanding shares of CVR Energy for $30.00 per share (a bid valued at $2.6 billion). Before this announcement Icahn held about 14.5% of the company.
Implicit in his reasoning is that in a time of high oil prices and growing demand, CVR Energy is severely undervalued, and that the company could be sold to a larger oil company such as ConocoPhilips, HollyFrontier, Marathon Petroleum, or Valero Energy, for up to $7 billion.
Whether this is a serious bid to gain control, or just a speculative but temporary ploy to drive up stock prices for himself, and other shareholders, we will have to wait and see.
CVR has acknowledged that it had received notice of Icahn’s takeover bid and proxy challenge that it was consulting investment advisors at Deutsche Bank and Goldman Sachs, and the Wachtell, Lipton, Rosen & Katz law firm.
Over the years, Icahn’s takeover bids and proxy fights have helped him build a net worth of $10.5 billion. Whatever CVR’s current leaders will do, they will not take his actions lightly.
Photo by 401K, used under a Creative Commons license.