CVR Energy’s board urged shareholders to reject the offer from Icahn, as it represented an 8.7 percent premium over its closing stock price as of Feb. 15, 2012, the last day before Icahn announced the offer, and 3.9 percent to its highest closing stock price during the six months prior to the announcement of the offer, among other reasons.
The board of directors also said that the offer substantially undervalued the company that the company’s potential long-term value exceeded $30 per share. The board ultimately agreed to permit stockholders to make the decision because, “But the Board also understands, based on the results of Mr. Icahn's tender offer on April 2, that many of the Company's stockholders may prefer to realize value in the near term and would consider the offer, as revised, an attractive near-term alternative.”
If Icahn is able to sell the company, there is a provision stating that shareholders will receive as much as $7 more per share.
On May 1, CVR reported its first quarter results. It had a net loss of $25.2 million on net sales of $1.97 billion, compared to net income of $45.8 million on net sales of $1.17 billion in the first quarter of 2011. Though the company had strong operating results, they were offset by an unrealized loss before tax on derivatives of $128.1 million.
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