Commercial Metals snubs Icahn's $1.7 billion bid
(Reuters) - Commercial Metals Co (CMC.N) rejected billionaire investor Carl Icahn's $1.73 billion bid to buy out the metals recycler, saying the offer substantially undervalued the company and was "opportunistic."
The stock has stayed below the $15 per-share offer that Icahn Enterprises LP IEP.N made last week -- indicating investors considered a deal was unlikely.
"I don't think it's their intention to put the company up for sale, but obviously if there is a higher offer down the road, they have a fiduciary responsibility to take a look at that," said analyst Kuni Che of CRT Capital Group.
The company repeated on Monday that stockholders need not take any action on the proposal as it "did not constitute a formal tender offer." Icahn had earlier refuted the claim and said the offer was formal.
Separately, in a regulatory filing, Commercial Metals urged its shareholders to vote against Icahn's proposals which require stockholder approval to authorize, adopt or amend any rights plan.
The company had adopted a shareholders rights plan in July to keep Icahn from increasing his stake in the company.
"Icahn is making an aggressive push to acquire the company at this time to achieve a bargain basement price for CMC," the company's Lead Director Anthony Massaro said in a statement.
Icahn Enterprises did not immediately respond to a call and an email seeking comment.
Commercial Metals had lost about a third of its market value this year before Icahn unveiled his bid last week.
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.
"Right now, his investment is capped at ten percent. If the poison pill is removed, then that could pave the way for him to offer a premium above $15 or for another potential bidder to come in," analyst Che said.
Analysts had earlier named rivals Nucor (NUE.N), Schnitzer Steel Industries (SCHN.O), Gerdau SA (GGB.N) and Steel Dynamics (STLD.O) as interested buyers if Commercial Metals sought any.
Shares of the company closed at $14.09 on Monday on the New York Stock Exchange.