Carl Icahn shelled out $2 billion for an 82% stake in CVR Energy (NYSE:CVI) last year, and it has been money well spent. Since then, the company has returned almost 90% — and Icahn will be adding to his gains today by taking its CVR Refining (NYSE:CVRR) division public.
The deal will involve the issuance of 20 million shares at a range of $24 to $26. The lead underwriters include Credit Suisse (NYSE:CS), Citigroup (NYSE:C), Barclays (NYSE:BCS), UBS Securities (NYSE:UBS) and Jefferies (NYSE:JEF).
CVR Refining, an operator of two refineries in Coffeyville, Kan., and Wynnewood, Okla., has benefited from a decline in crude prices, which has expanded margins. CVR Refining is structured as a master limited partnership to reduce the tax bite for cash distributions to shareholders, and it is expected to pay out a juicy yield of 19%.
Icahn also says he will purchase as much as $100 million of CVR Refining at its IPO — he might see more potential than just the spinoff proceeds … or it might just be a smart way of stoking demand for the deal.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.
A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.
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