Commercial Metals Corp. (NYSE: CMC) announced this morning that its board of directors had unanimously rejected an unsolicited bid of $15/share ($1.73 billion total) from Carl Icahn and Icahn Enterprises LP (NYSE: IEP). The company’s Lead Director said:
The CMC Board believes that Mr. Icahn’s proposal substantially undervalues the Company and is an opportunistic attempt – at a time when we are at a low point in the economic and industry cycle – to transfer the future value of CMC from its stockholders to Carl Icahn,” said CMC Lead Director Anthony A. Massaro. “It’s important that our stockholders understand that Mr. Icahn is making an aggressive push to acquire the Company at this time in an attempt to achieve a bargain basement price for CMC.
Icahn launched the bid last Monday and pushed CMC’s share price up about 25%, but the bid was still well below CMC’s 52-week high of $18.20. When he made the offer, Icahn said that the company was badly managed and that he would sell-off non-core assets and immediately install new management.
Icahn’s recent record for acquisitions has been poor. He gave up on Lions Gate Entertainment Corp. (NYSE: LGF), The Clorox Co. (NYSE: CLX), and Mentor Graphics Corp. (NASDAQ: MENT) after his bids were rejected, but share prices in each of these companies fell following Icahn’s abandonment of the takeover offers.
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