Metals recycler CMC rejects Carl Icahn's $1.73-bn buyout offer
05 Dec 2011
US metals recycler Commercial Metals Co (CMC) today rejected billionaire activist-investor Carl Icahn's $1.73-billion buyout offer, saying the opportunistic offer substantially undervalues the company.
"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 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," he added.
Late last month, Icahn Enterprises LP, holding a 9.98-per cent stake, had offered to buy CMC for $15 per share, representing a 31-per cent premium to CMC's closing price of $11.45 on the New York Stock Exchange on 25 November, the day of the offer. (See: Carl Icahn offers to buy struggling Commercial Metals for $1.73 billion)
Icahn, CMC' largest shareholder, had in October nominated three directors to the company's board, which prompted the company to adopt a stockholder rights plan with a 10-per cent threshold, making it difficult for Icahn to acquire a bigger stake.
Irving, Texas-based Commercial Metals, manufactures and recycles steel and metal products, among other materials. It has 33 scrap metal processing plants and more than $1.4 billion debt.
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