NEW YORK (AP) ? Billionaire investor Carl Icahn is taking his buyout offer that values Commercial Metals Co. at $1.73 billion directly to the company's stockholders, a day after the scrap-metal processor rejected the bid.
Icahn Enterprises Holdings LP said Tuesday that it plans to start a tender offer for all of Commercial Metals' outstanding stock at $15 per share, which was a 7 percent premium to the Irving, Texas, company's closing stock price of $14.09 on Monday. In morning trading Tuesday, Commercial Metals shares rose 13 cents to $14.22.
When Commercial Metals rebuffed Icahn's offer on Monday it said that the bid undervalued its future prospects and the company as a whole and "is opportunistic and not in the best interest of Commercial Metals' stockholders."
On Friday, Icahn had said that he was giving Commercial Metals until 9 a.m. Eastern time on Monday to set up a meeting to discuss his offer.
In an open letter to Commercial Metals' board, Icahn had said that if his company did not hear from Commercial Metals by the designated time, "we intend to take matters into our own hands." He did not elaborate.
Commercial Metals rejected the proposal Monday, but Icahn is forging ahead with his attempts to buy the company.
Icahn said in a statement Tuesday that he was disappointed that Commercial Metals rejected his bid and that the tender offer would give shareholders the chance to decide for themselves what they wish to do with their company.
He said the tender offer needs at least 40.1 percent of shares to be validly tendered and not withdrawn.
Icahn, known for buying and shaking up struggling companies with mixed success, already owns almost 10 percent of Commercial Metals. If the tender offer is successful, Icahn would gain a majority stake in Commercial Metals.
Icahn had wanted to combine Commercial Metals with his existing metals recycling businesses and sell off the rest of its assets, refocusing on its core North American operations. Icahn already owns PCS Metals Inc.
One obstacle the tender faces is that Commercial Metals' board would need to lift a "poison pill" that's in place. Poison pills are typically implemented to try to prevent hostile takeovers.
But Icahn said if Commercial Metals decides not to lift the poison pill and waive a particular section of Delaware General Corp. law after hearing from a majority of shareholders, he would leave the tender offer open and seek a court order to get Commercial Metals to comply.
Commercial Metals makes, recycles and markets steel and metal products, among other materials.
Shares of Icahn Enterprises' stock dropped 35 cents to $39.05 in morning trading Tuesday.
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