Reuters: Private Equity: UPDATE 3-Icahn gets 55 pct of CVR shares; proxy fight looms

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UPDATE 3-Icahn gets 55 pct of CVR shares; proxy fight looms Apr 3rd 2012, 16:20 Tue Apr 3, 2012 12:20pm EDT * Icahn says 55 pct of CVR stock tendered to him * Icahn has nominated nine board members * CVR shares up 6 pct April 3 (Reuters) - About 55 percent of CVR Energy Inc's outstanding shares were tendered into Carl Icahn's $2.26 billion takeover offer for the crude oil refiner, setting the stage for a showdown between the billionaire investor and the crude oil refiner. CVR shares, which have risen more than 18 percent since Icahn unveiled his stake in the company in January, were up 6 percent at $28.84 at midday Tuesday on the New York Stock Exchange. Icahn, who has offered to buy CVR for $30 a share with hopes of quickly reselling the refiner, had said he would withdraw his bid if less than 36 percent of the company's shares were tendered. He will now press forward with a proxy fight to place nine directors on the company's board. Icahn is CVR's top shareholder with a 14.5 percent stake in the company. In a letter to CVR's board, Icahn suggested that his board nominees be seated. Failing that, "we will move to the next phase of our campaign - the proxy fight," he wrote. "Once we win the proxy fight, we will replace the current CVR board with my slate, which intends to remove the poison pill immediately," Icahn wrote. Poison pills are shareholder rights plans designed to thwart takeovers. Such plans allow companies to issue new shares if a suitor acquires shares over a certain threshold. CVR adopted a shareholder rights plan soon after Icahn reported his stake in the company. CVR downplayed the significance of the results of the tender offer, noting that Icahn cannot purchase any more shares at this time because of the poison pill. "The real choice for stockholders will be at our annual meeting where they will decide whether to elect Mr. Icahn's hand-picked nominees," CVR said in a statement. 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, HollyFrontier, Tesoro Corp, Valero Energy, Marathon Petroleum or ConocoPhilips. However, he later said selling CVR "will not be easy." Eliecer Palacios, energy sector specialist at Maxim Group, said it was hard to believe that someone other than Icahn would be interested in buying the company. "Best of luck trying to sell CVR at $37 per share ... I think he picked the wrong company to unlock shareholder value," Palacios said. Icahn's takeover offer for CVR includes a "contingent value right" that would enable shareholders to receive additional cash if the company were 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 and dropped his attempt to get board seats at Clorox Co. In August, prescription drug maker Forest Laboratories fended off his efforts to get board seats. Link this Share this Digg this Email Reprints

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