SUGAR LAND, Texas, March 1, 2012 /PRNewswire/ -- CVR Energy,
Inc. (NYSE: CVI), a refiner and marketer of petroleum fuels and a
majority owner of CVR Partners, LP (NYSE:UAN), a nitrogen
fertilizer producer, announced today that its Board of Directors,
in consultation with its independent financial and legal advisors,
has unanimously determined that the unsolicited tender offer
by entities controlled by Carl
Icahn, to acquire all of the outstanding shares of CVR
Energy for $30.00 per share in cash
(subject to downward adjustment), plus a "contingent cash payment
right," is inadequate and not in the best interests of its
stockholders.
(Logo: http://photos.prnewswire.com/prnh/20071203/CVRLOGO)
In reaching its decision, the Board of Directors determined that
the offer substantially undervalues the company and the significant
growth opportunities inherent in its current plan, particularly
given its proven track record of delivering value to its
stockholders, including producing 65 percent in total returns for
CVR stockholders over the last year. The Icahn offer also
contains an extraordinarily long list of conditions that provide
Mr. Icahn with maximum flexibility to avoid closing the
offer. It also completely fails to protect minority
stockholders that choose not to tender into the Icahn offer, makes
no provision for the indebtedness that would be triggered if Mr.
Icahn prevails in his offer or his announced proxy contest and
contains a contingent cash payment right that is unlikely to
provide stockholders with any additional value. Accordingly,
the Board strongly recommends that CVR Energy shareholders reject
the Icahn offer and not tender any shares into the offer.
A copy of the letter from CVR Energy's Board of Directors to the
Company's stockholders is below.
March 1, 2012
Dear Fellow Stockholder,
Today, CVR Energy's Board of Directors, after consultation with
its independent legal and financial advisers, unanimously
recommended that CVR Energy stockholders reject the unsolicited
tender offer from entities affiliated with Carl Icahn to acquire CVR Energy for
$30.00 per share, which amount may be
reduced pursuant to the terms of the Icahn offer, plus a
"contingent cash payment right" (CCP) that we do not believe will
deliver any value.
Your Board has determined that Mr. Icahn's hostile
offer substantially undervalues CVR Energy, is replete with
conditions and "outs," is structurally flawed and provides
opportunities for abuse of CVR Energy's stockholders.
We believe the Icahn offer is an opportunistic attempt by
Mr. Icahn to acquire CVR Energy at an inadequate price and at
a time when we are about to reap the benefits of our recent
acquisition and our valuable position as a leading mid-continent
refiner.
In short, your Board firmly believes that the continued pursuit
of the Company's strategy will deliver far greater value for CVR
Energy's stockholders than Mr. Icahn's offer and strongly
recommends stockholders reject Mr. Icahn's self-serving offer
and not tender their shares.
Your Board of Directors unanimously recommends that you
REJECT the offer and DO NOT TENDER any of your shares
into the offer.
In reaching its conclusion and making its recommendation, the
Board considered numerous factors, including, among others, the
following:
- The Company has a substantial track record of delivering
outstanding results, and we are poised to capitalize on new
opportunities to deliver value to our stockholders.
- CVR Energy stockholders have realized total returns of 527%
over the past three years and 65% over the past year, significantly
outperforming both our peers and the S&P 500.
- The Board has decisively taken action to create value,
including the initial public offering of CVR Partners in
April 2011; the accretive acquisition
of Gary-Williams Energy Corporation in December 2011; and its initiation of regular
quarterly dividends and the proposed sale of CVR Partners units to
fund a special dividend and to further strengthen our balance
sheet.
- Due to its geographical location, logistics access and
operating flexibility, the Company's refining business is uniquely
positioned to benefit from the increasing production of North
American crude oil coming from Canada, the Rockies and the mid-continent
regions of the United States,
which provides the Company with superior margins and
industry-leading returns.
- The Company's crude gathering initiatives have reduced the
Company's cost of crude oil (increasing refining margins by
approximately $2 per barrel of crude
oil gathered), and its storage initiatives have provided
significant operating flexibility and the opportunity to generate
additional operating income.
- The synergies and other benefits from our recently completed
acquisition of the Wynnewood
refinery are just beginning to be realized – and will be even
greater than originally expected.
- Icahn's offer delivers a paltry premium to CVR Energy's
stockholders.
- Represents a premium of only:
- 8.7% over the Company's closing stock price as of February 15, 2012, the last day prior to Mr.
Icahn's announcement of the Offer;
- 13.3% to the Company's stock price as of January 12, 2012, when indexed to match the mean
growth of the Company's peers (January
12 is the day prior to the public announcement of Mr.
Icahn's investment); and
- 3.9% to the Company's highest closing stock price during the
six months prior to the announcement of the Offer of $28.88, which occurred on September 8, 2011.
- The offer price is subject to downward adjustment, dollar for
dollar, for any distributions paid to CVR Energy stockholders,
including the special dividend expected to be paid to CVR Energy
stockholders as a result of the sale of the UAN units.
- The offer price is at the low end of the range of Wall Street
analysts' price targets ($30/share -
$35/share) for the Company as of
February 15,
2012.
- Icahn's offer is replete with conditions, a number of which
are under the control of Mr. Icahn, and fails to contain
protections for CVR Energy and its stockholders. It also
provides no protection for stockholders who do not
tender.
- Mr. Icahn's offer includes 16 separate conditions, many of
which purport to be subject only to Mr. Icahn's personal,
subjective determination, providing him maximum flexibility to
avoid completing his offer.
- Given Mr. Icahn's track record of failing to complete tender
offers, as described further in the enclosed Schedule 14D-9, your
Board believes that there is an extremely low likelihood that Mr.
Icahn intends to complete his offer.
- Mr. Icahn's offer is structurally coercive, because
stockholders who do not tender into the offer are not protected by
the promise of a "back-end" merger delivering the offer price to
nontendering stockholders, creating a risk that they will be
minority shareholders in a delisted, deregistered and perhaps
financially impaired company controlled by Mr. Icahn.
- If Mr. Icahn wins control of CVR Energy, he will trigger an
obligation to offer to repay $670
million of CVR Energy debt at a premium – his offer does not
address how this very significant liability will be handled.
- Mr. Icahn's CCPs are unlikely to deliver any incremental
value. The CCPs are simply a bad idea for CVR Energy
stockholders for a number of reasons including:
- CVR Energy stockholders will participate in the upside of a
sale merely by holding their shares. They do not need a CCP,
which only caps the potential upside by limiting the sale period to
nine months.
- Mr. Icahn is incentivized to avoid triggering the
CCPs. Payments are due under the CCPs only if a definitive
agreement for a sale is executed during a nine-month window after
the tender offer is completed. Mr. Icahn is therefore
incentivized NOT to complete a transaction within that timeframe,
so that any benefits from a sale transaction can accrue to him and
not the holders of the CCPs. If an agreement for a sale
transaction is executed nine months and one day after the
completion of the offer, holders of the CCPs would receive
nothing. Notably, in his tender offer filings, Mr. Icahn has
made no binding commitment to pursue a sale transaction during the
nine-month window. Rather he expressly disclaims any
fiduciary duties to the CCP holders.
The full text of the Company's Schedule 14D-9 is available at
the SEC's website, www.sec.gov and in the Investor Relations
section of the Company's website at www.cvrenergy.com. If you
have any questions concerning CVR Energy's Schedule 14D-9 or need
additional copies of CVR Energy's publicly filed materials, please
contact MacKenzie Partners at (800) 322-2885 (Toll Free).
We appreciate your continued support.
Sincerely,
Jack Lipinski
Chairman and Chief Executive Officer
CVR Energy, Inc.
A complete discussion of the factors contributing to the Board
of Directors' recommendation is included in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9. CVR
Energy's Schedule 14D-9 and other filings with the Securities and
Exchange Commission (SEC) are available at the SEC's website,
www.sec.gov.
Deutsche Bank AG and Goldman, Sachs & Co. are serving as
financial advisors to CVR Energy and Wachtell, Lipton, Rosen &
Katz is serving as legal advisor. Mackenzie Partners, Inc. is
serving as proxy solicitor.
Forward Looking Statements
This news release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. You can generally identify forward-looking
statements by our use of forward-looking terminology such as
"anticipate," "believe," "continue," "could," "estimate," "expect,"
"explore," "evaluate," "intend," "may," "might," "plan,"
"potential," "predict," "seek," "should," or "will," or the
negative thereof or other variations thereon or comparable
terminology. These forward-looking statements are only
predictions and involve known and unknown risks and uncertainties,
many of which are beyond our control. For a discussion of
risk factors which may affect our results, please see the risk
factors and other disclosures included in our Annual Report on Form
10-K for the year ended Dec. 31,
2011. These risks may cause our actual results, performance
or achievements to differ materially from any future results,
performance or achievements expressed or implied by these
forward-looking statements. Given these risks and
uncertainties, you are cautioned not to place undue reliance on
such forward-looking statements. The forward-looking
statements included in this press release are made only as of the
date hereof. CVR Energy disclaims any intention or obligation
to update publicly or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.
About CVR Energy, Inc.
Headquartered in Sugar Land,
Texas, CVR Energy, Inc.'s subsidiary and affiliated
businesses operate independent refining assets in Coffeyville, Kan. and Wynnewood, Okla. with more than 185,000
barrels per day of processing capacity, a marketing network for
supplying high value transportation fuels to customers through
tanker trucks and pipeline terminals, and a crude oil gathering
system serving central Kansas,
Oklahoma, western Missouri and southwest Nebraska. In addition, CVR Energy subsidiaries
own a majority interest in and serve as the general partner of CVR
Partners, LP, a producer of ammonia and urea ammonium nitrate, or
UAN, fertilizers.
Important Additional Information
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. In response
to the tender offer commenced by IEP Energy LLC and Icahn
Enterprises Holdings L.P., as well as other entities affiliated
with Carl C. Icahn, CVR Energy, Inc.
("CVR Energy") has filed with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9. CVR ENERGY STOCKHOLDERS ARE STRONGLY
ENCOURAGED TO READ THE COMPANY'S SOLICITATION/RECOMMENDATION
STATEMENT ON SCHEDULE 14D-9 BECAUSE IT CONTAINS IMPORTANT
INFORMATION. Stockholders may obtain a free copy of the
Solicitation/Recommendation Statement on Schedule 14D-9, as well as
any other documents filed by CVR Energy, for no charge at the SEC's
website at www.sec.gov. Copies will also be available at no charge
in the "Investor Relations" section of the Company's website at
www.cvrenergy.com or by writing to CVR Energy at 2277 Plaza Drive,
Suite 500, Sugar Land, Texas,
77479, Attn: Senior Vice President, General Counsel and
Secretary.
In addition, CVR Energy will file a proxy statement with the
SEC. The definitive proxy statement will be mailed to
stockholders of CVR Energy. CVR ENERGY STOCKHOLDERS ARE URGED
TO READ THESE AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN
IMPORTANT INFORMATION. Stockholders will be able to obtain free
copies of these documents (when available) and other documents
filed with the SEC by CVR Energy through the web site maintained by
the SEC at www.sec.gov and in the "Investor Relations" section of
the Company's website at www.cvrenergy.com.
Certain Information Regarding Participants
CVR Energy, its directors and certain of its executive officers
may be deemed to be participants under the rules of the SEC.
Security holders may obtain information regarding the names,
affiliations and interests of CVR Energy's directors and executive
officers in CVR Energy's Annual Report on Form 10-K for the year
ended December 31, 2011, filed with
the SEC on February 29, 2012, and its
proxy statement for the 2011 Annual Meeting, which was filed with
the SEC on April 20, 2011.
These documents can be obtained free of charge from the sources
indicated above. Additional information regarding the
interests of these participants in any proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will also be included in any proxy statement
and other relevant materials to be filed with the SEC if and when
they become available.
For
further information, please contact:
|
|
|
|
Investor
Relations:
|
Media
Relations:
|
|
|
Ed
Morgan
|
Steve
Eames
|
CVR
Energy,
Inc.
|
CVR
Energy, Inc.
|
281-207-3388
|
281-207-3550
|
Or
|
MediaRelations@CVREnergy.com
|
Jay
Finks
|
Or
|
CVR
Energy,
Inc.
|
Tom
Johnson or Chuck Burgess
|
281-207-3588
|
Abernathy
MacGregor Group
|
InvestorRelations@CVREnergy.com
|
212-371-5999
|
SOURCE CVR Energy, Inc.