FRANKFURT - New solar installations reached a fresh record of 7.5 gigawatts (GW) in Germany in 2011, playing into the hands of advocates for steeper cuts in tariff subsidies to reduce growth of solar power and the resulting higher costs for consumers.
Icahn plans Commercial Metals buy; investors skeptical
(Reuters) - Carl Icahn offered to buy out Commercial Metals Co (CMC.N) in a deal valuing the metals recycler at $1.73 billion, but investors remained skeptical over the billionaire investor's poor record in closing acquisitions this year.
Icahn Enterprises LP's IEP.N $15 per share bid represents a 31 percent premium to Commercial Metals' Friday close. The stock traded at a discount to the offer and closed at $14.17 on the New York Stock Exchange on Monday.
The offer is Icahn's latest this year, which has seen him bow out of several proxy battles and takeover attempts.
In September, Icahn had dropped his push to get board seats at Clorox Co (CLX.N) and drug maker Forest Laboratories (FRX.N). He also gave up on his years-long public campaign against Lions Gate Entertainment (LGF.N), agreeing to sell his stake in the studio.
Icahn, Commercial Metals' largest shareholder with an about 10 percent stake, last month nominated three directors to the company's board. In July, the company adopted a stockholder rights plan, making it harder for Icahn to take a bigger stake in it.
"Given the recent similar situations that Icahn has been involved in, we expect CMC to trade at a significant discount to the offer, barring any positive developments," MKM Partners analyst Keith Moore said.
"We anticipate that Icahn may initiate a hostile $15 tender if management rejects his proposal, as we expect it will."
In a statement, Commercial Metals said Icahn's open letter to the company's board on Monday "did not constitute a formal offer and, as such, stockholders do not need to take any action."
The company will review the letter and said Goldman, Sachs & Co. was serving as its financial adviser.
In a separate statement later, Icahn insisted his offer was "formal."
"The offer we delivered to the Board earlier today is, in all respects and without any doubt, a formal all cash offer to acquire the company," he said.
MKM's Moore said Commercial Metals' rivals Nucor (NUE.N), Schnitzer Steel Industries (SCHN.O), Gerdau SA (GGB.N) and Steel Dynamics (STLD.O) might be interested buyers if Commercial Metals sought any.
BHP Billiton (BHP.AX) and Rio Tinto (RIO.AX) (RIO.L) have already flagged weak demand for most commodities, as producers and consumers face tighter access to credit.
The weak market has hit shares of many steelmakers, including Commercial Metals', making them attractive acquisition targets.
Commercial Metals, which had been posting weak results for the past two years, last month said it would cut about 13 percent of its global workforce as it closes of some of its underperforming facilities.
The Irving, Texas-based company's shares have dropped nearly 75 percent since touching a life-high of $39.80 in June 2008, trailing a roughly 60 percent fall in the Dow Jones US Iron & Steel index .DJUSST during the same period.
Icahn said he didn't have "any confidence that (Commercial Metals') board will ever hold management accountable for poor performance."
"We are prepared to enter immediate negotiations and would like to see a tender offer launched as soon as possible," his letter said.
Icahn plans to merge Commercial Metals with PSC Metals, which he acquired from Philip Services Corp for $335 million in 2007.
(Additional reporting by Sumit Jha in Bangalore; Editing by Anthony Kurian, Saumyadeb Chakrabarty)
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