Institutional shareholders like
Dimensional Funds and
Blackrock all built their 3%-plus stakes in Commercial Metals in 2010, and at much higher prices than Icahn.
And that's where the Boy Scout issue comes in.
Icahn is pressing his case against management, which in October, announced a winding down and sale of a large steel mill in Croatia as it consolidates some complicated and unprofitable international operations. About management's new strategy and its confidence that a recovery is just beginning for Commercial Metals and the housing industry, Icahn wrote in a Jan. 4 letter, "This is not the Boy Scouts," meaning that the road for second chances has ended.
Some favor Icahn over Commercial Metals' management in the near term, while also forecasting significant value in shares over the next few years. "We continue to believe Icahn has a good chance of receiving strong shareholder support since the tender offer represents a "free" option." writes Kuni Chen of CRT Capital in a January note. Chen downgraded his rating on the company to "Fair Value," reflecting that Icahn's catalyst to share prices of $15 had ended. "Our sum-of-the-parts valuation suggests
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