Icahn goes hostile with his $1.73-billion offer for Commercial Metals

A day after Commercial Metals Co (CMC) rejected Carl Icahn's $15 a share buyout offer, the billionaire activist-investor, who  went hostile with his $1.73-billion bid.

Icahn Enterprises LP, the investment arm of Icahn, which already owns a 9.98-per cent stake in the US metals recycler, said it will start a tender offer and will require the support of at least 40 per cent of the CMC's shareholders.

"After attempting to work with the board, we are launching this tender offer so that shareholders can decide for themselves what they wish to do with their company," Icahn said in a statement.

On 5 December CMC rejected the corporate raider's bid, saying the opportunistic offer substantially undervalues the company (See: Metals recycler CMC rejects Carl Icahn's $1.73-bn buyout offer).

Icahn's offer of $15 per share, representing a 31-per cent premium to CMC's closing price of $11.45 on the New York Stock Exchange on 25 November, has met with scepticism by CMC's shareholders as the company's stock was trading marginally up at $14.15, indicating that the offer may not go through.

Icahn, CMC' largest shareholder, had nominated three directors to the company's board in October, prompting it to adopt a stockholder rights plan with a 10-per cent threshold, making it difficult for Icahn to acquire a bigger stake.