CVR Energy, Inc. (NYSE:CVI) (“CVR Energy”) today
announced that it intends to commence an offering to
exchange shares of CVR Energy common stock for up
to 37,154,236 common units of CVR Refining, LP (“CVR
Refining”) (the “exchange offer”). The value of the exchange offer
is $27.63 per common unit, representing a 25% premium over the
closing common unit price of CVR Refining on May 25, 2018. The
exchange ratio for the exchange offer is one common unit for 0.6335
shares of CVR Energy common stock.
The exchange offer is being conducted upon the terms and subject
to the conditions set forth in a prospectus/offer to exchange filed
today with the Securities and Exchange Commission as a part of CVR
Energy’s registration statement on Form S-4 and Tender Offer
Statement on Schedule TO.
CVR Energy believes that, in light of recent tax
reform, many CVR Refining unitholders may wish to hold their
investment in the form of common stock rather than partnership
interests.
An exchanging unitholder will cease to have any
direct interest in CVR Refining with respect to the common units
exchanged but will continue to participate indirectly in the
performance of CVR Refining to the extent of such unitholder’s
ownership of shares of CVR Energy common stock received in the
exchange offer.
An exchanging unitholder will also participate
directly in the performance of CVR Energy as a stockholder of CVR
Energy, including any future premium that may be received by
stockholders of CVR Energy in connection with a sale or other
corporate transaction.
The commencement of the exchange offer is subject to the
effectiveness of the registration statement. The consummation of
the exchange offer is subject to, among other things, a sufficient
number of common units of CVR Refining being validly tendered and
not properly withdrawn such that, following consummation of the
exchange offer, CVR Energy and entities affiliated with CVR Energy,
including Icahn Enterprises L.P., will own more than 80% of the
common units of CVR Refining.
Pursuant to the partnership agreement of CVR
Refining, once the general partner and its affiliates own more than
80% of the common units of CVR Refining, the general partner and
its affiliates will have the right, but not the obligation, to
purchase all, but not less than all, of the common units of CVR
Refining held by unaffiliated unitholders of CVR Refining at a
price not less than their then-current market price, as calculated
pursuant to the terms of the partnership agreement. Accordingly,
the general partner and its affiliates will be entitled to exercise
this call right after the consummation of the exchange offer.
Pursuant to the partnership agreement, the general partner is not
obligated to obtain a fairness opinion regarding the value of the
common units of CVR Refining to be repurchased by it upon exercise
of the call right. Pursuant to the partnership agreement, the
general partner may use its own discretion, free of fiduciary duty
restrictions, in determining whether to exercise the call right.
The general partner and its affiliates (including CVR Energy and
Icahn Enterprises L.P. and its affiliates) have no current plans to
exercise the call right at this time or upon the consummation of
the exchange offer. However, there can be no assurance that the
general partner and its affiliates will not exercise the call right
in the future.
On May 25, 2018, the last full trading day before the date of
this press release, the closing price of one share of CVR Energy
common stock was $43.61 and the closing price of one common unit of
CVR Refining was $22.10. Based on these closing prices and the
exchange ratio above, the exchange offer would have a per common
unit value of $27.63 per common unit, representing a 25% premium
over the closing unit price of CVR Refining on May 25, 2018. The
value of the exchange offer will change as the market prices of CVR
Energy common stock and CVR Refining common units fluctuate during
the offer period and thereafter and may therefore be different from
the price set forth above at the expiration time of the exchange
offer and thereafter. Unitholders are encouraged to obtain current
market quotations for shares of CVR Energy common stock and CVR
Refining common units prior to making any decision with respect to
the exchange offer.
The purpose of the exchange offer for CVR Energy is to increase
its ownership of CVR Refining. As of the date of the offer, CVR
Energy and its affiliates (including affiliates of Icahn
Enterprises L.P.) beneficially owned approximately 69.8% of the
common units of CVR Refining. Assuming the maximum number of
37,154,236 common units of CVR Refining are validly tendered for
exchange and exchanged by CVR Energy, CVR Energy and its affiliates
(including affiliates of Icahn Enterprises L.P.) will hold
approximately 95% of the outstanding common units of CVR
Refining.
CVR Energy, CVR Refining, the information agent or the exchange
agent or any of their respective affiliates are not making any
recommendation to CVR Refining unitholders as to whether to tender
or refrain from tendering their common units for exchange. CVR
Refining unitholders must make their own decision as to whether to
exchange their common units and, if so, how many common units to
tender for exchange. In doing so, CVR Refining unitholders should
carefully read the entire prospectus/offer to exchange, and the
information incorporated by reference therein, and related letter
of transmittal.
THIS PRESS RELEASE DOES NOT CONSTITUTE AN
OFFER TO PURCHASE, OR A SOLICITATION OF AN OFFER TO SELL, ANY
SECURITIES. THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY.
THE EXCHANGE OFFER WILL BE MADE ONLY PURSUANT TO A PROSPECTUS/OFFER
TO EXCHANGE, LETTER OF TRANSMITTAL AND RELATED MATERIALS THAT CVR
ENERGY INTENDS TO DISTRIBUTE TO CVR REFINING’S UNITHOLDERS. CVR
ENERGY WILL FILE A REGISTRATION STATEMENT ON FORM S-4 AND A TENDER
OFFER STATEMENT ON SCHEDULE TO WITH THE SEC, EACH OF WHICH WILL
INCLUDE THE PROSPECTUS/OFFER TO EXCHANGE. THE COMMENCMENET OF THE
EXCHANGE OFFER IS SUBJECT TO THE EFFECTIVENESS OF THE REGISTRATION
STATEMENT ON FORM S-4. CVR REFINING’S UNITHOLDERS SHOULD READ THESE
MATERIALS AND THE DOCUMENTS INCORPORATED BY REFERENCE THEREIN
CAREFULLY AND IN THEIR ENTIRETY BEFORE MAKING ANY DECISION WITH
RESPECT TO THE EXCHANGE OFFER. THESE MATERIALS, WHEN AVAILABLE, CAN
ALSO BE OBTAINED FREE OF CHARGE FROM THE SEC’S WEBSITE AT
WWW.SEC.GOV.
Cautionary Statement Regarding Forward-Looking
StatementsThis press release may contain “forward-looking
statements” within the meaning of the federal securities laws,
including Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended. In this context, forward-looking statements often
address expected future business and financial performance and
financial condition, and often contain words such as “expect,”
“anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,”
“would,” “target,” similar expressions, and variations or negatives
of these words. Forward-looking statements by their nature address
matters that are, to different degrees, uncertain, such as
statements about the commencement and consummation of the proposed
exchange offer and the anticipated benefits thereof. Such
statements involve risks, uncertainties and assumptions. If such
risks or uncertainties materialize or such assumptions prove
incorrect, the results could differ materially from those expressed
or implied by such forward-looking statements and assumptions. All
statements other than statements of historical fact are statements
that could be deemed forward-looking statements, including any
statements regarding the expected benefits and costs of the
exchange offer; the expected timing of the completion of the
exchange offer; the ability of CVR Energy to complete the exchange
offer considering the various conditions to the exchange offer,
some of which are outside of its control, including those
conditions related to regulatory approvals and number of shares
tendered; any statements of expectation or belief; and any
statements of assumptions underlying any of the foregoing. Risks,
uncertainties and assumptions include the possibility that expected
benefits may not materialize as expected; that the exchange offer
may not be timely completed, if at all; that, prior to or after the
completion of the exchange offer, the businesses of CVR Energy or
CVR Refining may not perform as expected; and other risks that
are described in CVR Energy’s and CVR Refining’s latest Annual
Report on Form 10-K and their other filings with the SEC. CVR
Energy assumes no obligation and does not intend to update these
forward-looking statements.
About CVR Energy, Inc.Headquartered in Sugar
Land, Texas, CVR Energy is a diversified holding company primarily
engaged in the petroleum refining and nitrogen fertilizer
manufacturing industries through its holdings in two limited
partnerships, CVR Refining, LP and CVR Partners, LP. CVR Energy
subsidiaries serve as the general partner and own 66 percent of the
common units of CVR Refining and 34 percent of the common units of
CVR Partners.
About CVR Refining, LPHeadquartered in Sugar
Land, Texas, CVR Refining, LP is an independent downstream energy
limited partnership that owns refining and related logistics assets
in the Midcontinent United States. CVR Refining’s subsidiaries
operate a complex full coking medium-sour crude oil refinery with a
capacity of 132,000 barrels per calendar day (bpcd) in Coffeyville,
Kansas, and a complex crude oil refinery with a capacity of 74,500
bpcd in Wynnewood, Oklahoma. CVR Refining’s subsidiaries also
operate and invest in supporting logistics assets, including
approximately 570 miles of owned, leased and joint venture
pipelines, approximately 130 crude oil transports, a network of
strategically located crude oil gathering tank farms, and
approximately 6.4 million barrels of owned and leased crude oil
storage capacity.
For further information, please contact:
Investor Contact:Jay FinksCVR Energy, Inc.(281)
207-3588InvestorRelations@CVREnergy.com
Media Relations:Brandee StephensCVR Energy,
Inc.(281) 207-3516MediaRelations@CVREnergy.com
CVR Energy (NYSE:CVI)
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