NEW YORK (AP) — Financier Carl Icahn's firm said Wednesday that if its bid for Commercial Metals Co. gets enough support, it will extend the offer while management bargains for a higher sales price.
Icahn Enterprises Holdings LP. is offering $15 per share, which would value the scrap-metal company at about $1.7 billion. On Tuesday, the company board urged shareholders to reject what it called "an opportunistic, low-ball price" from Icahn.
In an open letter Wednesday to Commercial Metals directors and shareholders, Icahn Enterprises suggested that the company isn't worth $15 per share with the current board and management. The company's performance "has been egregious," Icahn said.
Icahn said if more than 40 percent of shares are tendered — giving Icahn at least 50 percent control — the investment firm will extend the tender offer. This, Icahn said, would let the company "conduct a fair sale process" in which $15 per share would become the floor price, and avoid a proxy fight. During the extension, shareholders could withdraw their shares from the tender offer, Icahn said.
A spokeswoman for Commercial Metals declined to comment.
Icahn, who already owns about 10 percent of Commercial Metals, took his bid directly to shareholders in early December, after the company rejected his overtures.
The Irving, Texas-based company makes and recycles steel and metal products. It has lost money the last two years. Icahn plans to combine its core North American operations with his current metals-recycling businesses and sell off other parts of the company.
Icahn said that management is asking investors for "yet another chance to risk shareholder money on their global expansion plans ... now is not the time to give them one more chance."
At a meeting scheduled for Feb. 3, shareholders will vote for three incumbent directors or a slate of three candidates nominated by Icahn.
The shares rose 54 cents, or 3.9 percent, to close at $14.45 and added another penny to $14.46 in after-hours trading. On Nov. 25, the day before Icahn announced plans to launch a tender offer, the shares closed at $11.45.