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Carl Icahn’s Commercial Metals Stake Continues to Lose Shine

January 03, 2013 | About:
It has been about a year since activist investor Carl Icahn dropped his bid for Irving, Texas-based Commercial Metals Co. (CMC). After a proxy contest lasting several months, and the company urging its shareholders to refuse Icahn’s $15 per share tender offer, Commercial Metals can continue to welcome the New Year Icahn-free, as the takeover Guru reported his third stake reduction in the company today.

Icahn, who once had about 10 percent control of the company, now has 6.17 percent of the company’s outstanding shares. In the third quarter of 2012, he had 6.82 percent outstanding shares.

GuruFocus Real Time Picks reported that the transaction got rid of 9.43 percent of his stake, bringing his total shareholding to a little over 7 million shares, from his largest total of 11.5 million shares in the third quarter of 2011.



Icahn first acquired Commercial Metals in 2010, starting off with 2.4 million shares at the average price of $13.80, and quickly increasing in the quarters that followed. He had the goal of placing new members in the Commercial Metals board. But soon after Commercial Metals confirmed and showed reasons why Icahn’s tender offer completely undervalued the company, Icahn backed away and reported his first stake reduction in the first quarter 2012.

Commercial Metals called the bid “opportunistic, [at a] low-ball price.” The company also emphasized to its shareholders that Icahn’s board nominees were not qualified, making sure to mention Icahn’s past failed takeover attempts and how his current offer “creates an illusion for a meaningful premium.”

"The company has made a number of promises to shareholders, which shareholders appear to believe will be beneficial to the stock," Icahn said in a statement. "We respect the views of the shareholders and hopefully their decision not to tender will prove to be the right one.”

Icahn has lost at several high-profile proxy contests and takeover attempts. The most recent ones that made headlines were Greenbrier Companies Inc. (GBX) and Oshkosh Corp. (OSK).

Commercial Metals is down 1.15 percent this morning, trading at $15.40. It has 1 star in Business Predictability, 6 in Financial Strength and 4 in Profitability and Growth. (See the company’s 10-Year Financials.)

View more of Icahn’s latest trades here. Also view his undervalued stocks, top growth companies and high yield stocks.

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About the author:

Dianne Tordillo
Dianne Tordillo is staff writer for GuruFocus.com. She reports on a variety of financial news, primarily dealing with investor portfolios and stock trades. Her articles also highlight insider trades, as well as the many useful features of GuruFocus.

Visit Dianne Tordillo's Website


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