Icahn drops $1.73 billion bid for Commercial Metals

Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference, held at the New York Stock Exchange, June 27, 2007.

(Reuters) - Billionaire investor Carl Icahn on Wednesday dropped his $1.73 billion hostile bid for Commercial Metals Co (CMC.N) after failing to pick up support among the metal company's other shareholders.

Shares of the company were down 5.3 percent to $13.97 on the New York Stock Exchange at midday on Wednesday. Icahn had offered $15 a share.

Icahn, who controls about 10 percent of the company, had hoped to secure support from investors holding another 40.1 percent of the company's shares. Only 23 percent of the shares were tendered in response to his offer, Icahn said.

The activist investor also withdrew his slate of nominees to the company's board.

"The company has made a number of promises to shareholders, which shareholders appear to believe will be beneficial to the stock," Icahn said in a statement. "We respect the views of the shareholders and hopefully their decision not to tender will prove to be the right one."

Icahn has lost out on a number of recent high-profile proxy contests and takeover attempts. Last year, he gave up on his years-long public campaign against Lions Gate Entertainment LGF.TO, as well as attempts to get board seats at Clorox Co (CLX.N) and drugmaker Forest Laboratories. (FRX.N)

Still, the 75-year-old billionaire told the New York Post last week that he had trading profits of 35 percent in 2011. His investments included energy companies El Paso Corp EP.N and Chesapeake Energy (CHK.N).

Commercial Metals had dismissed Icahn's $15-a-share tender offer -- which represented a 31 percent premium when Icahn made his original approach in November -- as "substantially undervalued" and "opportunistic." The stock briefly topped the $15 mark last week.

(Reporting by Michael Erman in New York and Swetha Gopinath in Bangalore; Editing by Saumyadeb Chakrabarty and John Wallace)