Icahn-backed refiner mulls selling itself
Seven years after billionaire investor Carl Icahn bought a controlling ownership of Sugar Land’s CVR Energy, the company is considering selling itself or other strategic alternatives, the refiner said this week.
CVR said it has hired Bank of America Merrill Lynch to act as its financial adviser in evaluating a potential sale. There is no timeline for completing the evaluation, which might not result in a transaction or sale, the company said.
CVR Energy also said Tuesday that it sold its 1.5 million-barrel Cushing, Okla., crude oil terminal to an affiliate of Houstonbased Plains All America Pipeline for $36 million.
CVR Energy earned $289 million in net income last year, up from $235 million a year earlier, according to the company’s annual report. It has a stock market value of about $4.7 billion.
CVR Energy’s stock jumped more than 2 percent Wednesday morning to hit $48.25 by midmorning on the news of the potential sale, before falling to close at $46.42, roughly where it stood before the announcement. CVR stock has climbed about 35 percent this year.
Icahn acquired a controlling stake in CVR Energy in 2012 and considered taking the company private. Icahn has opposed a biofuel credits program that refineries such as CVR pay when they can’t blend renewable fuels such as ethanol or biodiesel with petroleum, He served as an adviser to President Donald Trump following his election, before stepping down in August 2017.
In an April filing with the U.S. Securities and Exchange Commission, the company said it is cooperating with the U.S. Attorney’s office for the Southern District of New York following a September 2017 subpoena related to Icahn’s activities regarding renewable fuel policy and his role as special adviser to Trump.
The refiner and its subsidiaries employ about 1,500. CVR owned 3.8 million barrels of storage capacity in 2018 and leased storage of 2.5 million barrels, according to its 2018 annual report. CVR’s refining unit runs refineries in Coffeyville, Kan., and Wynnewood, Okla.