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Icahn Draws First 2012 Success With CVR Energy

NEW YORK (TheStreet) -- Carl Icahn has won a $30 a share bid for refiner CVR Energy (CVI) after the company's management changed course and accepted his offer, which was initially viewed as undervalued.

Management relented reluctantly after Icahn announced that 55% of outstanding shareholders had tendered their shares to his hostile campaign earlier in April.

Carl Icahn

For Icahn, the CVR Energy bid -- worth roughly $2.26 billion -- is his first successful activist campaign in some time after failing to win tenders for cleaning products giant Clorox (CLX) in late 2011, and a bid for Commercial Metals (CMC) this year.

"I am gratified that CVR's board of directors has decided to let the owners of the company decide for themselves whether to accept our offer. I've believed all along that our offer is a "win-win" for shareholders and thank all shareholders, that have tendered, for their support," said Icahn in a regulatory filing on Thursday.

In his February bid for CVR Energy, Carl Icahn dusted off the M&A playbook he used when making a disastrous $12.6 billion bid for Clorox (CLX) in 2011.

After taking a 14.5% stake in CVR Energy, Icahn looked to use a larger controlling stake of the refining and nitrogen fertilizer company to drum up bidding interest from a competitor, mirroring an unsuccessful tender offer for the cleaning products giant, which ended last September without shareholder support or competing bids.

While CVR Energy management agreed to let his offer stand, they did so extremely reluctantly, removing a poison pill they enacted to prevent Icahn's accumulation of shares, but maintaining that the bid was undervalued.

"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," said CVR Energy in a statement.

After failing with Clorox and Commercial Metals in January, Icahn has only partially succeeded by winning CVR Energy. While the company is in his hands, he will now need to handle it and finding a long-term buyer quickly, as he's pledged to shareholders. "We agree with the Board that the company's potential long-term value exceeds $30 per share. That is one of the reasons we are buying it. However, we also believe that if the company cannot be sold in the next two months there are major risks to earnings in the short and intermediate term," said Icahn in the filing

CVR Energy shares rose over 7% in afternoon trading to $30.21, just above Icahn's offer price. Year-to-date, CVR Energy shares are up over 50% on Icahn's bid and M&A speculation.

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