Investor Carl Icahn now holds about 80% of oil refiner and fertilizer maker CVR Energy Inc. (NYSE: CVI). Icahn held about 69% of the company before the close of his extended tender offer last Friday.
Icahn’s offer of $30/share for CVR’s two refineries and majority stake in fertilizer maker CVR Partners L.P. (NYSE: UAN) also includes a contingency payment if he is able to sell the company’s bits for more than that. The two refineries are relatively small, totaling about 185,000 barrels/day together, and are not likely to fetch much more than $200-$250 million. The value will be in the crude stocks, and that’s been dropping every day for more than a month now. The fertilizer operation is solid, but small.
Don’t be surprised if Icahn holds on to CVR for longer than many people expected. The value is in the crude and he can probably afford to wait for the price to go back up.