Carl Icahn is trying to make massive changes to the board of CVR Energy, Inc. (NYSE:CVI), in hopes of selling the company. CVR last week came out with a statement telling investors to ignore Icahn’s offer. Since than, Icahn has yet to say anything. However, the CEO, Jack Lipinski, came out with another letter to shareholders today, urging them to ignore Icahn’s offer which expires on April 2nd.

Icahn is the largest shareholder of the company, with a 15% stake. He promised to drop his bid if he cannot if he cannot get 51% of shareholders to side with him.

Icahn has been trying to get the company to sell itself, and believes CVR is trading at a discount to its true intrinsic value. Icahn’s view is that a US refiner like CVR with high profit margins, should be trading at a much higher valuation. CVR energy is trading at $25.94,  Icahn offered to buy the company for $30 a share, although he admits that it will be hard to sell.

Below is the full statement from the CEO to investors:


As you are likely aware, Carl Icahn has launched a tender offer to acquire CVR Energy at a price that your Board believes substantially undervalues the company. Mr. Icahn is also waging a proxy contest to replace your entire Board with a slate of nominees who are largely his current and former employees and who have little or no experience in the petroleum or fertilizer industries. He has also issued a series of press releases attacking the Board and management of CVR Energy.

We believe CVR Energy stockholders should know the facts regarding the actions your Board and management team have taken and the milestones achieved. By executing on our strategic plan, we believe that your team will deliver greater value for stockholders than Mr. Icahn’s offer, over both the near and long term.

Mr. Icahn’s offer is set to expire on April 2, 2012. Mr. Icahn has stated that he will abandon the offer and his proxy fight if fewer than 36 percent of the company’s shares, other than the shares he already owns, are tendered into the offer by his publicly announced “deadline.” We urge our stockholders not to tender into the Icahn offer and to end his distracting and detrimental campaign.


CVR Energy has an undisputed track record of delivering value to stockholders. CVR Energy, led by its current Board and management team, has delivered superior results to our stockholders over almost any time period you examine since the company went public in 2007, far outperforming all of our peers as well as the leading indices:


     CVI Price
    Peer Median
    Rank Among Peers      S&P 500
Since CVI IPO      41     – 44     #1         – 7
Last 3 Years      436     67     #1         70
Last 1 Year      30     14     #1         8

Note: Market data as of March 23, 2012. IPO performance based on period from October 22, 2007 to March 23, 2012. CVI initial value based on IPO price of $19.00 per share. Peers are ALJ, DK, HFC, TSO and WNR.


We believe that we have been able to deliver these strong results through careful planning, the leadership of an experienced management team and a singular focus on capitalizing on opportunities to deliver stockholder value. Our investments and improvements in our Coffeyville plant enabled us to expand our operations as the NYMEX 2-1-1 crack spreads widened, helping us to achieve record results in 2011. In addition, our team has executed a number of important transactions to enhance stockholder returns, including: the successful initial public offering of CVR Partners in April 2011; the accretive acquisition of Gary-Williams Energy Corporation in December 2011, which added additional scale and diversity to our asset base; and, most recently, our announcement of the initiation of regular quarterly dividends and a meaningful special dividend funded through the proposed sale of a portion of our CVR Partners units.

The Board of Directors and management of CVR Energy have a plan for continued growth. We have taken a number of steps designed to enable us to continue to deliver superior financial returns to our stockholders – in excess of the Icahn offer – as well as develop new opportunities. Our plan for delivering value to our stockholders includes:



Increasing cash flow by delivering on the synergies and other benefits from the recently completed acquisition of the Wynnewood refinery – the synergies are already on track to be significantly greater than originally expected. For example, we have been able to leverage our aggressively-managed crude oil procurement effort along with our growing crude oil gathering and logistics business to reduce the cost of crude oil to supply the Wynnewood refinery.



Capitalizing on the increasing production of North American crude oil coming from Canada, the Rockies and the mid-continent regions of the United States. Given the location of our refineries and our steadily growing crude oil gathering and logistics business, we expect this relatively recent change in the supply environment to continue and to allow the company to achieve superior margins and industry-leading returns well into the foreseeable future.



Expanding the company’s crude oil gathering and logistics business which allows for increased operating income via higher refining margins, provides operating flexibility and builds a platform for a potential future gathering and logistics MLP.


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