(Reuters) - CVR Energy (CVI.N) urged stockholders to reject billionaire investor Carl Icahn’s $30-a-share tender offer saying the hostile bid undervalued the company and was “opportunistic.”
The offer is “inadequate” and not in the best interest of the company or its stockholders, CVR said in a statement.
“The offer also contains an extraordinarily long list of conditions that provide Icahn with maximum flexibility to avoid closing the offer,” CVR said.
Last month, Icahn, CVR’s top shareholder with a 14.54 percent stake, had called for a sale of the company saying its stock price did not reflect current high profit margins enjoyed by U.S. refiners.
The activist investor, whose offer values the crude oil refiner and fertilizer maker at $2.6 billion, said a sale of the company could fetch as much as $37 a share.
CVR Energy shares, which have dipped 1.5 percent since Icahn first urged the company to sell itself on February14, briefly touched the $30 mark last week.
Icahn’s offer includes a “contingent value right” that enables shareholders to receive additional cash if the company gets sold for more than $30 a share. [ID:nL4E8DG50I]
Texas-based CVR on Thursday said the contingent cash payment right is unlikely to provide stockholders with any additional value.
The company said Icahn’s offer also fails to protect minority stockholders that choose not to tender their shares.
CVR said it is slated to benefit from rising output of North American crude oil, which gives it high margins.
Refiners in the United States, particularly in the Midwest, have raked massive profits out of the record spread between London-based Brent and U.S. benchmark West Texas Intermediate (WTI) due to a supply glut at the Cushing, Oklahoma delivery hub.
CVR’s shares closed at $27.21 on Wednesday on the New York Stock Exchange.
Reporting by Swetha Gopinath and Vaishnavi Bala in Bangalore; Editing by Supriya Kurane