IRVING, Texas (AP) – Commercial Metals Co. has rebuffed billionaire investor Carl Icahn’s $1.73 billion takeover offer, saying the proposal undervalues the scrap-metal processor.
Commercial Metals said Monday that Icahn’s offer undervalues its future prospects and the company as a whole and “is opportunistic and not in the best interest of Commercial Metals’ stockholders.”
“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 Commercial Metals,” Anthony Massaro, the company’s lead director, said in a statement.
On Friday, Icahn told Commercial Metals’ board that it had until Monday at 9 a.m. Eastern time to set up a meeting to discuss his $15 per share offer, which was a 7 percent premium to Commercial Metals’ Friday’s closing stock price of $13.99.
In an open letter to Commercial Metals’ board, Icahn said that if his company did not hear from Commercial Metals by the designated time, “we intend to take matters into our own hands.” He did not elaborate further.
A call to Icahn Enterprises LP, which made the offer, was not immediately returned.
Icahn, known for buying and shaking up struggling companies with mixed success, already owns almost 10 percent of Commercial Metals. He had wanted to combine Commercial Metals with his existing metals recycling businesses and sell off the rest of its assets, refocusing on its core North American operations. Icahn already owns PCS Metals Inc.
Commercial Metals, based in Irving, Texas, makes, recycles and markets steel and metal products, among other materials.
Massaro said that Commercial Metals has taken steps to improve its long-term financial and operational performance — including streamlining operations, and cutting its overall cost structure — under the new leadership of CEO Joe Alvarado and CFO Barbara Smith, who both joined the company earlier this year.
(Copyright 2011 by The Associated Press. All Rights Reserved.)