Icahn makes Commercial a takeover target

USA – Carl Icahn says he wants to buy Commercial Metals Co. for about US$ 1.73 billion and combine parts of it with his own metal recycling businesses. The billionaire US investor, who already owns almost 10% of Commercial Metals, also plans to nominate three of his associates to be directors on its board.

The Texas-based company manufactures, recycles and markets steel and metal products, among other materials. Its stock has lost more than 30% of its value since the beginning of 2011 and approximately 70% since the early months of the 2008 recession. Mr Icahn, who owns PSC Metals Inc., wants to combine Commercial Metals with his existing metal recycling businesses and sell off the rest of its assets, refocusing on its core North American operations.

Mr Icahn is known for buying and shaking up struggling companies, with mixed success.

He amassed his 9.98% stake in Commercial Metals last summer after first buying up the stock in August 2010. Days after his stake was revealed, the company adopted a so-called ‘poison pill’ defence that would be triggered whenever any hostile investor obtained a share of the company exceeding 10%.

Mr Icahn points out that the deal would not need financing and that his company is ready to begin negotiations and launch a tender offer for Commercial Metals’ shares as soon as possible. In a statement, Commercial Metals says it will review Mr Icahn’s overture and decide what response would be in the best interests of the company and its shareholders.