When activist investor Carl Icahn launched his $2.6 billion hostile takeover of CVR Energy Inc. (NYSE: CVI) a couple of weeks ago, it was pretty clear that CVR would fight back. The company, a refiner and marketer of petroleum as well as a nitrogen fertilizer maker, today rejected Icahn’s $30/share offer, calling it “inadequate and not in the best interests of its stockholders.”
At the time of his first bid for CVR, Icahn suggested that the company was worth $37/share, so it’s no surprise that the CVR board turned down his offer. Of course that value would only be realized by chopping up the company and selling off the pieces.
CVR’s total refining capacity is just 180,000 barrels/day, but it does have access to cheap crude, which pushed refining margins last year to almost $34/barrel. Icahn offered CVR a contingent-value proposition that would pay shareholders more than $30/share if he sold the company for more than that within 9 months.
CVR’s rejection letter is available here.