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CVR Energy (CVI) Urges Stockholders To Reject Carl Icahn's Offer As Inadequate

 March 01, 2012 07:31 AM

CVR Energy Inc. (NYSE: CVI), a refiner and marketer of petroleum fuels and a majority owner of nitrogen fertilizer producer CVR Partners LP (NYSE:UAN), said its board of directors unanimously urged stockholders to reject Carl Icahn's hostile tender offer as inadequate.

On February 16, the entities controlled by Carl Icahn announced a tender offer to buy all outstanding shares of CVR Energy for $30.00 per share in cash plus a "contingent cash payment right".

[Related -Dividend Roundup: BNS, CRY, CVI, SPW, TUC, OXLC]

In consultation with its independent financial and legal advisors, the company's board has unanimously determined that the unsolicited tender offer is inadequate and not in the best interests of its stockholders.

The board determined in reaching its decision that the offer substantially undervalues the company and the significant growth opportunities inherent in its current plan.

The company has proven track record of delivering value to its stockholders, including producing 65% in total returns for CVI stockholders over the last year.

Chief Executive Jack Lipinski said the board has determined that Icahn's hostile offer is replete with conditions and "outs," is structurally flawed and provides opportunities for abuse of CVR Energy's stockholders.

[Related -Icahn Enterprises (IEP) Net Plunges, Revenue Jumps In 4Q]

The Icahn offer also contains an extraordinarily long list of conditions that provide Icahn with maximum flexibility to avoid closing the offer.

The board also determined that the offer also completely fails to protect minority stockholders that choose not to tender into the Icahn offer, makes no provision for the indebtedness that would be triggered if Icahn prevails in his offer or his announced proxy contest and contains a contingent cash payment right that is unlikely to provide stockholders with any additional value.

Accordingly, the board strongly recommends that CVR Energy shareholders reject the Icahn offer and not tender any shares into the offer.

CVI closed Wednesday's regular session down 1.77% at $27.21, while UAN closed up 1.55% at $26.86.



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