Metal Center News
Minimize

  
12-7-2011 News
Minimize

CMC Board Rejects Icahn’s Offer

The board of Irving, Texas-based Commercial Metals Co. has rejected the unsolicited buyout offer from its largest shareholder Carl Icahn and his company Icahn Enterprises L.P. In late November, Icahn sent a letter proposing the acquisition of CMC for $15 per share.

"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," says CMC Lead Director Anthony A. 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."

“Mr. Icahn also fails to take into account the substantial anticipated benefits of the strategic plan being implemented at the company. Led by our new CEO, Joe Alvarado, and our new CFO, Barbara Smith—both highly experienced industry veterans who assumed these positions just earlier this year—CMC has taken meaningful steps to improve long-term financial and operational performance. The board firmly believes that the continued pursuit of our strategy will deliver greater value for our stockholders than Mr. Icahn's proposal,” Massaro says.

In Icahn’s letter to CMC, he noted his offer was a 31 percent premium over the stock’s closing price on Nov. 25, and a 72.6 percent premium on its 2011 low of $8.60. He said the premium was the result of his company’s existing ownership of PSC Metals, which he would combine with Commercial Metals’ recycling assets and then sell CMC’s non-core assets. He would also appoint a new management team to run the steel business.

“As a 10 percent shareholder of Commercial Metals, we are extremely concerned about the capabilities and behavior of the current board and management and, therefore, we intend to nominate three individuals as directors at the company’s 2012 annual meeting of shareholders, as well as make several proposals for shareholder consideration. We do not believe the current board is capable or willing to undertake the actions necessary to enable Commercial Metals to compete in the future,” Icahn wrote to CMC.

His proposal did not constitute a formal tender offer to stockholders. Thus, CMC’s directors say, the stockholders did not need to take any action.

In response, Icahn announced he would make a tender offer to buy Commercial Metals at $15 per share. "It is disappointing that this board and management team rejected our all-cash offer to buy Commercial Metals at $15 per share. Our tender offer will be directed to shareholders and will require shareholder action. After attempting to work with the board, we are launching this tender offer so that shareholders can decide for themselves what they wish to do with their company."

  
From the Editor's Desk
Minimize
July 2014: Paper or Pixels? New MCNDigital Offers New Choices
More...
 
Pause
Business Practices and Technologies
Minimize
July 2014: Manage the Slow-Movers to Boost Inventory Turns
More...
The Cutting Edge, a service center technology supplement to Metal Center News
More...
Summer 2013
More...
 
Pause
New Products
Minimize
Trumpf Expands Range on TruMark 5000 Series
More...
Koike Aronson Debuts New Plasma Cutter
More...
Miyachi Unitek's Sigma XY
More...
New TMC is Messer's Largest Cutting Machine
More...
Laserdyne 795 XLZ Designed for 3D Parts
More...
Mazak's STX Champion Cuts Thick Sheets
More...
 
Pause
Directories
Minimize

 
Metal Distribution 2014  is your on-line guide to Metal Producers, Equipment Manufacturers and Software companies.
 



 
2014 Directory of Master Distributors
Not Published on This Web site
The Metal Center News Directory of Master Distributors—distributors who sell to other distributors—is an invaluable tool for service centers seeking new sources for special or hard-to-find products. Master distributors play an important role in the marketplace, giving service centers an alternative to buying in mill quantities and helping to remove redundant and excess inventories from the distribution channel.


Print copies are available for $85 U.S. for each copy.
Download Order Form.
 
2014 Directory of Toll Processors
Not Published on This Web site
Metal Center News'
annual toll processing directory is a simple-to-use resource to help companies locate service providers that can meet their specific processing needs.


Print copies are available for $85 U.S. for each copy. Download Order Form.
Privacy Statement  |  Terms Of Use
Copyright by Metal Center News



Wednesday, August 20, 2014