By August 12, 2016 Read More →

CVR Energy preparing offer to buy Delek Holdings

CVR Energy

The New York Post reported Carl Icahn may be preparing to take full ownership of CVR Energy. He currently owns an 82 per cent stake in the oil refiner. 

CVR Energy backed by Carl Icahn

Aug 11 (Reuters) – U.S. oil refiner CVR Energy Inc, backed by activist investor Carl Icahn, is preparing to make an offer to buy smaller peer Delek US Holdings Inc, the New York Post reported, citing a source close to the situation.

Icahn, who had an 82 percent stake in CVR as of April 19, is speculated to be building a personal stake in Delek, the Post said on Thursday.

Icahn might also be preparing to take full ownership of CVR, the report said.

Delek’s shares rose 12.7 percent to $16.78 in extended trading, while CVR’s were up about 9.8 percent at $15.07. Delek had a market capitalization of about $921 million as of Thursday’s close, while CVR’s equity value was $1.19 billion.

Brentwood, Tennessee-based Delek took a 48 percent stake in oil refiner Alon USA Energy in May 2015 and was reportedly looking to buy more shares of the company.

It was not clear whether a potential deal between Delek and CVR would have any impact on Delek’s plans for Alon USA.

CVR declined to comment. Delek and Alon USA were not immediately available for comment.

Most U.S. refiners have said they expect to process less crude in the second half of the year as margins shrink due to a gasoline glut.

Delek’s shares have fallen nearly 40 percent this year through Thursday’s close, while CVR stock had tumbled about 65 percent.

Delek operates 155,000 barrels per day (b/d) in combined production capacity at refineries in Tyler, Texas and El Dorado, Arkansas.

Sugar Land, Texas-based CVR specializes in petroleum refining and nitrogen fertilizer manufacturing. Its capacity for refining crude oil and feedstocks totaled 210,488 b/d in the second quarter.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Savio D’Souza)

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