Icahn moves closer to CVR Energy buy; shares rise

Tue Apr 3, 2012 9:45pm EDT

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

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

Credit: Reuters/Chip East

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(Reuters) - CVR Energy's (CVI.N) top shareholder Carl Icahn said about 55 percent of the crude oil refiner's shares had been tendered to his $2.26 billion offer, taking the billionaire investor a step closer to buying the company.

CVR stock, which has gained 18 percent of its value since Icahn unveiled his stake in the company in January, was up 6 percent at $28.80 on Tuesday morning on the New York Stock Exchange.

Icahn, who plans to buy CVR for $30 a share and then sell it, already holds a 14.5 percent stake in the company.

"It would be a shame if the board took any action to thwart or delay our offer... if they do so, we will seek to hold them accountable to the maximum extent permitted by law," Icahn said in a letter to the board of the company.

Soon after Icahn reported his stake in CVR, the company had adopted a shareholders' rights plan, or a poison pill, to make it difficult for the investor to raise his stake.

Icahn on Tuesday said he intends to install his nominees as board members soon so that the poison pill is removed.

"The real choice for stockholders will be at our annual meeting where they will decide whether to elect Mr. Icahn's hand-picked nominees in place of our qualified and experienced Board of Directors...," CVR said in a statement.

Eliecer Palacios, energy sector specialist at Maxim Group, said he expects a "fight" between the board and Icahn to continue.

TOUGH SALE?

In early March, Icahn estimated a sale of the company could fetch as much as $37 a share and could attract potential buyers such as Western Refining (WNR.N), HollyFrontier (HFC.N), Tesoro Corp (TSO.N), Valero Energy (VLO.N), Marathon Petroleum (MPC.N) or ConocoPhilips (COP.N).

He later said selling CVR could be tough.

"Best of luck trying to sell CVR at $37 per share...I think he picked the wrong company to unlock shareholder value," Maxim's Palacios said.

Icahn's offer also includes a "contingent value right" that would enable shareholders to receive additional cash if CVR is sold for more than $30 a share.

The shareholder support for his offer comes after a series of setbacks for the corporate raider-turned-activist investor.

Last year, he gave up on his years-long public campaign against Lions Gate Entertainment LGF.TO and dropped his attempt to get board seats at Clorox Co (CLX.N). In August, prescription drug maker Forest Laboratories FRX.N fended off his efforts to get board seats.

(Reporting by Vaishnavi Bala in Bangalore; Editing by Don Sebastian)

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