NEW YORK (AP) â¿¿ Billionaire investor Carl Icahn said he will drop his takeover fight for Commercial Metals Co. if his tender offer fails.
Icahn Enterprises Holdings L.P. sent a letter to Commercial Metals shareholders Tuesday that said Icahn will drop his proxy fight to buy the company if at least 40.1 percent of shares are not tendered in Icahn's offer.
The metal company has said that the $15-per-share tender offer, which values the Irving, Texas, company at about $1.73 billion, is a bad deal for shareholders, and its own strategic plan will deliver better value. Its board last week recommended that shareholders reject Icahn's offer.
Icahn, known for buying and shaking up struggling companies with mixed success, already owns almost 10 percent of Commercial Metals. If 40.1 percent or more of shares are tendered, Icahn said he believes that "even this board will capitulate to the wishes of a large majority of their shareholders," according to the letter. He said if the board fights a successful tender offer, he will take it to court."We wish to state plainly again, that our goal is to acquire the company or to see it sold," the letter said. Commercial Metals, based in Irving, Texas, manufactures, recycles and markets steel and metal products, among other materials. It has posted an annual net loss in the past two years. Icahn wants 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. But Icahn said that after meeting with Commercial Metals' management, he does "not wish to remain a minority holder in a company run by the current board" if the tender offer fails. Shares of Commercial Metals dropped 23 cents, or 1.6 percent, to $13.93 in afternoon trading. The stock has traded between $8.64 and $18.20 over the last year.