Carl Icahn, activist investor, has been interested in buying CVR Energy(NYSE:CVI) as he already has a commanding share of the outstanding shares. The CVR Energy board has been fighting Icahn and urging other investors to vote against Icahn’s purchase of the company for $2.6 billion.
More SEC fillings from CVR Energy were just released, and the details are reported below.
Icahn has been trying to woo other CVR Energy shareholders by writing letters. In fact, he has written his fourth letter in the last 10 days. In the letters, the famed investor has been calling out the board saying that they have been “distorting the facts” and essentially stretching the truth as to the successes of the company.
In the latest letter, Icahn said that his offer to buy the company for $2.6 billion will be extended through April 2nd. He continued attacking the CEO and board of directors saying that are not interested in making value for shareholders but rather building up a company.
After he ripped the management he went on to basically explain why he was qualified to run the company. He recited his past energy investment successes such as his 66% return on Chesapeake Energy in only 13 months, and about doubling his investment in El Paso in 11 months.
Surely he has some past energy investments but the bottom line is so far other shareholders are not impressed and are doubtful that this deal will come to pass. Obviously, Icahn will not be getting the support of CVR’s board of directors after continuously prodding at past performances and decisions.
That leaves his only hope to the shareholders. If a majority of the shareholders agree that Icahn can create more value than the current conditions then he might have a chance.
Shares are currently trading under Icahn’s $30 proposal, proving that other shareholders are doubtful of the deal. Currently, shares are trading at $27.33 and have not seen that major bounce yet over $30 which means that a majority believe the deal is a good idea and that it will go through.
I can see this Icahn-CVR drama going on for awhile but it will be interesting to see how Icahn will try to entice other shareholders. It will also be interesting to see if CVR’s board will remain against the proposal or if they eventually go along with the idea. If I know one thing, its Carl Icahn has seen this situation before and he will most likely win it just because he knows how to work the board and get all the shareholders behind him.