SUGAR LAND, Texas, April 19, 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, today announced that it has signed a
transaction agreement with Carl C.
Icahn and certain entities under his control that would
permit Mr. Icahn to complete his tender offer for $30 in cash per share plus a "contingent cash
payment" right (CCP), if he obtains a majority of the shares. The
agreement also provides important protections for CVR Energy
stockholders. The Board initiated negotiations with Mr. Icahn after
CVR Energy stockholders recently indicated their support for a
near-term transaction at $30 per
share plus the CCP.
(Logo: http://photos.prnewswire.com/prnh/20071203/CVRLOGO)
The Board is not recommending that stockholders tender into Mr.
Icahn's offer and continues to believe CVR Energy's potential
long-term value exceeds $30 per
share. But the Board also understands, based on the results
of Mr. Icahn's tender offer on April
2, that many of the Company's stockholders may prefer to
realize value in the near term and would consider the offer, as
revised, an attractive near-term alternative. Accordingly,
the Board has decided to permit CVR Energy stockholders to
determine whether or not they wish to sell their shares at the
price offered by Mr. Icahn.
If a majority of shares (taking into account those already owned
by Mr. Icahn) are not tendered into his offer, Mr. Icahn will
terminate his offer and his pending proxy contest for control of
the CVR Energy Board of Directors.
Transaction Structure
The transaction agreement provides that:
- Mr. Icahn will amend his existing tender offer within the next
three business days to eliminate or reduce certain conditions to
the offer and will extend the expiration date until 10 business
days after the date of such amendment.
- At the end of this 10-business day period, if the shares
tendered into the revised offer represent more than a majority of
the outstanding shares when added to those shares already owned by
the Icahn entities (meaning approximately 36 percent of the
company's outstanding shares tender into the offer), Mr. Icahn will
be permitted to complete his offer.
- If the offer is completed, Mr. Icahn has agreed to immediately
provide a subsequent 10-business day offering period during which
stockholders who did not initially tender but do not wish to be
stockholders in the company after the change of control could
tender any remaining outstanding shares for the same offer price
plus the CCP.
- If at any time Mr. Icahn owns 90% of the outstanding shares, he
will complete a short-form merger under Delaware law pursuant to which all remaining
outstanding shares will be cancelled in exchange for receiving the
same per share consideration as paid in the tender offer plus the
CCP.
Whether Mr. Icahn buys a stockholder's shares during the tender
offer period or during the subsequent offering period or as part of
the short form merger, such stockholder will receive $30 in cash plus a CCP right.
During the tender offer period, the company will be permitted to
seek alternative acquisition proposals but will not be permitted to
terminate the agreement with Mr. Icahn. Mr. Icahn has also
agreed to continue to seek alternative acquisition proposals, with
the assistance of nationally recognized investment bankers, for 60
days beginning promptly after he completes his acquisition of
majority control of the company. Mr. Icahn also has committed to
accept any cash offer at a price equal to or greater than
$35 per share, net of investment
banking fees, during that period. In the event of any
subsequent sale, CVR Energy stockholders will receive additional
consideration in accordance with the terms of the CCP.
Agreement Includes Additional Stockholder Protections
The agreement, as structured, contains several protections for
stockholders that did not exist in Mr. Icahn's initial tender
offer, including:
- Reduced conditionality to the offer: The transaction agreement
eliminates or reduces many of the conditions to Mr. Icahn's offer
and increases the certainty of closing should the minimum tender
percentage be reached.
- Subsequent offering period: Minority stockholders who do not
tender in the initial offer period but who would prefer not to be
stockholders in a company controlled by Mr. Icahn will have an
additional opportunity to sell their shares.
- No forced sale: Stockholders will not be forced to sell their
shares unless Mr. Icahn acquires 90% of the outstanding
shares.
- Back-end merger: If Mr. Icahn acquires more than 90% of the
outstanding shares as a result of the tender offer or the
subsequent offering period, he is required to complete a merger
transaction whereby all remaining stockholders will receive the
same per share consideration that they would have received if they
had tendered those shares into the offer.
- Potential upside from a future sale: Stockholders who tender or
whose shares are cancelled and paid out in the short-form merger
may receive additional consideration pursuant to the CCP if the
company is subsequently sold.
CVR Provides Additional Financial Information
CVR Energy today also announced preliminary results for the
first quarter ended March 31, 2012.
Preliminary estimated sales for the quarter were $1.8 billion to $2.1 billion compared to
$1.167 billion for the three
months ended March 31, 2011.
Preliminary estimated operating income for the quarter was between
$140 million and $150 million
compared to operating income of $109.6
million for the first quarter ended March 31, 2011. Results for the quarter were
impacted by several factors, including increases in crack spreads
and beneficially wider crude oil differentials, a
shorter-than-planned turnaround at the Coffeyville refinery and strong operating
results from the Wynnewood
refinery for the first full quarter of operations as part of CVR
Energy.
Coffeyville and Wynnewood both benefited from a positive
operating environment. The average NYMEX 2-1-1 crack spread
increased 17 percent from $23.49 for
the fourth quarter of 2011 to $27.53
for the first quarter of 2012. During the quarter, the Coffeyville refinery turnaround was completed
ahead of schedule and under budget. The refinery was fully
operational by late March and is operating at approximately 117,000
barrels per day of crude throughput as of April 17, 2012.
The first quarter of 2012 represented the first full quarter of
operating our Wynnewood refinery
since acquiring it in December 2011.
Our technical expertise has already aided us in enhancing refinery
operations as we increased refinery capacity and optimized product
yields with little incremental capital. For the quarter the
refinery averaged approximately 58,000 barrels per day of crude
throughput after the impact of a maintenance-related partial
refinery shutdown during the second half of January. The refinery
was restored to full operations in early February and is running
crude throughput of approximately 69,000 barrels per day as of
April 17, 2012. Since acquiring the
asset, synergies are on track to be greater than initially
estimated driven by stronger crude throughput, beneficially wider
crude oil differentials and enhanced unit rates and yields.
Wynnewood has also aided us in
increasing our gathering business where we have added 7,000 bpd in
capacity.
Detailed documents describing the revised offer, the agreement
with Mr. Icahn and the company's position will be made available to
stockholders by early next week and will contain additional
information about the company's financial performance and
prospects.
Forward Looking Statements
This news release may contain forward-looking statements.
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.
These risks and uncertainties may include, but are not limited to,
(1) the failure of the tender offer to be consummated in accordance
with its terms, (2) the occurrence of any event, change or other
circumstance that could give rise to the termination of the
transaction agreement, (3) the failure of Mr. Icahn and his
affiliates to comply with their obligations under the agreement or
the tender offer, (4) the outcome of any legal proceedings
that may be instituted against one or both of Mr. Icahn and his
affiliates or the Company in connection with the transaction
agreement or the tender offer, (5) risks that the proposed
transaction disrupts current plans and operations and the potential
difficulties in employee retention as a result of the transaction,
(6) the risk that actual results from the first quarter of 2012 may
differ from the preliminary results contained in this news release;
and (7) the risk factors and other disclosures included in our
Annual Report on Form 10-K for the year ended Dec. 31, 2011, and any subsequently filed
quarterly reports on Form 10-Q. 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.
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 Kansas,
Oklahoma, western Missouri, southwestern Nebraska and Texas. 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. CVR Energy,
Inc. ("CVR Energy") understands that IEP Energy LLC and Icahn
Enterprises Holdings L.P., as well as other entities affiliated
with Carl C. Icahn described in this
news release (collectively, the "Offeror Parties"), intend to file
an amendment to their Tender Offer Statement on Schedule TO with
the Securities and Exchange Commission ("SEC"). In response
to the tender offer (as amended) commenced by the Offeror Parties,
CVR Energy filed a Solicitation/Recommendation Statement on
Schedule 14D-9 with the Securities and Exchange Commission ("SEC").
In addition, in connection with the agreement described in this
news release CVR Energy intends to amend its
Solicitation/Recommendation Statement on Schedule 14D-9 and file
such amendment with the SEC. CVR ENERGY STOCKHOLDERS ARE STRONGLY
ENCOURAGED TO READ CVR ENERGY'S SOLICITATION/RECOMMENDATION
STATEMENT ON SCHEDULE 14D-9 (AS AMENDED), INCLUDING THE FORTHCOMING
AMENDMENT, BECAUSE IT CONTAINS IMPORTANT INFORMATION. Stockholders
may obtain a free copy of the Solicitation/Recommendation Statement
on Schedule 14D-9 (as amended), 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 may file a definitive proxy statement
with the SEC for the 2012 annual meeting of stockholders. If
so, the definitive proxy statement will be mailed to stockholders
of CVR Energy. CVR ENERGY STOCKHOLDERS ARE URGED TO READ THE
DEFINITIVE PROXY STATEMENT 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. If the
short-form merger described in this press is consummated, the 2012
annual meeting of stockholders will not take place.
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 definitive
proxy statement and other relevant materials to be filed with the
SEC if and when they become available.
For
further information, please contact:
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Investor Relations:
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Media
Relations:
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Ed
Morgan
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Angie
Dasbach
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CVR
Energy, Inc.
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CVR
Energy, Inc.
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281-207-3388
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913-982-0482
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MediaRelations@CVREnergy.com
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Jay
Finks
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CVR
Energy, Inc.
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Tom
Johnson or Chuck Burgess
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281-207-3588
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Abernathy
MacGregor Group
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InvestorRelations@CVREnergy.com
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212-371-5999
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Larry
Dennedy
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MacKenzie
Partners
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212-929-5500
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SOURCE CVR Energy, Inc.