* Pension funds seek to stop Icahn from buying more shares
* Accuse Icahn of boosting position at less than fair value
June 6 Shareholders often sue corporate
directors when they adopt poison pills to fend off mergers.
Investors in CVR Energy Inc filed a lawsuit late on
Tuesday that does the opposite, they are seeking to force the
board, which is led by Carl Icahn, to adopt the defensive
Two pension funds asked Delaware's Court of Chancery to
order the board of CVR to adopt a poison pill that will prevent
Icahn from buying more shares in the oil refiner and fertilizer
The lawsuit seeks class action status.
Icahn, a billionaire investor, won control of the company in
May after he obtained 63 percent of the company's stock through
a $30-per-share tender offer.
After extending the tender offer deadline, he eventually
obtained 80 percent of CVR stock.
However, at that point he did not announce his intention to
conduct a back-end merger to obtain the rest of the stock and
the company's shares began falling, losing around 20 percent of
their value, according to the lawsuit.
"Icahn seized this opportunity to increase his position
without having to pay fair value to the remaining minority
shareholders," according to the lawsuit by the City of Tamarac
Firefighter Pension Trust Fund and the City of Miami General
Employees' and Sanitation Employees' Retirement Trust.
Icahn is now using a "squeeze-out scheme" to accumulate more
than 90 percent of CVR's shares on the open market, according to
the complaint. That would allow him to forcibly acquire the
remaining shares in a short-form merger under Delaware law.
Icahn did not immediately respond to a request for comment.
The two funds also seek a court order preventing Icahn from
buying more CVR stock in the open market on terms less favorable
than he offered in the tender.
The case is City of Tamarac Firefighter Pension Trust Fund
et al v Carl C. Icahn et al, Delaware's Court of Chancery, no.