A Texas-based oil refining and marketing company controlled by famed activist investor Carl Icahn has in the past six weeks spent nearly $140 million on Delek US Holdings shares and says it wants to talk about acquiring the Brentwood company.
In a filing Thursday with the Securities and Exchange Commission, CVR Energy and a number of entities under Icahn’s umbrella said they now control 14.9 percent of Delek. Their recent buying spree peaked from last Friday to Tuesday, when CVR bought nearly $50 million worth of Delek after the stock had been cut in half by the preceding week’s market turmoil. The Icahn team’s average cost per Delek share is about $12.70.
In their filing, CVR execs say they are “considering all of their options” but haven’t yet sat down with their peers at Delek.
“Representatives of the Reporting Persons intend to seek to have discussions with the Issuer regarding potential transactions,” they noted.
Shares of Delek (Ticker: DK) popped nearly 11 percent to $12.75 in after-hours action Thursday, adding to gains of almost 8 percent in regular trading and pushing the company's market value to about $900 million — about half of CVR’s (Ticker: CVI). A month ago, the stock was changing hands around $28.
As of late Thursday, Delek had not issued a response to Icahn’s filing. A company spokesman did not respond to an earlier request for comment.
Delek has reportedly been on Icahn’s radar for a while. In the summer of 2016, market chatter had CVR preparing a bid for Delek after the local company’s shares had slid 40 percent since the beginning of that year. That putative bid did not materialize.
CVR runs refineries in Oklahoma and southeast Kansas that combined have a capacity of about 215,000 barrels per day. By comparison, Delek runs four facilities — two in Texas and one in both Arkansas and Louisiana — that have a combined capacity of 302,000 barrels per day. Put together, the companies last year produced $690 million in net income on sales of more than $15.6 billion, with CVR being relatively more profitable.