CVR Energy (NYSE: CVI), an oil refining company in the Midwest, was offered a takeover worth $2.6 billion by billionaire Carl Icahn.
And on Thursday, the company rejected the offer, urging shareholders to do the same. A letter to shareholders from the board of directors said:
“We believe the Icahn offer is an opportunistic attempt by Mr. Icahn to acquire CVR Energy at an inadequate price.”
Because Icahn’s bid was worth $30 per share, an 8.7% premium over the shares at the time, and even less, about 3.9%, over highs of $28.88 in September.
On Friday afternoon, CVR shares were at $27.54, not much less than that.
Icahn had previously told the company that it could sell for $37 per share.
The board of directors expressed beliefs that Icahn’s offer created a lot of opportunities for him to pull out from the deal as well. It came with an “extraordinarily long list of conditions.”
CVR had announced a plan in February to sell part of CVR Partners, but Icahn told the company they would benefit more from a complete sale of the company.
Carl Icahn currently owns 14.5% of the company. He told the board that CVR would likely have a number of interested buyers, and not long after he put in a bid himself.
But his bid would not offer protection to minority stockholders without tendered shares. And his promise to allow shareholders an additional sum should the company sell for more than $30 per share would probably not actually provide that additional cash, the board believes.
So it urged shareholders to reject the bid, which was more for Icahn that CVR and its investors.
CVR owns oil refineries in Kansas and Oklahoma. Its net income in 2011 was $385.8 million, and revenue was up 23% that year.
That’s all for now,