Shares of Icahn Enterprises (IEP) fell in trading on Friday after the diversified holding company confirmed it was cutting its dividend payment in half to boost its stake in minor oil refiner CVR Energy (CVI). Earlier in the day, The Wall Street Journal reported that the company, owned by billionaire investor Carl Icahn, had decided to slash its dividend.
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As a result, IEP will lower its third-quarter dividend to $0.50 per depositary unit, down from $1 per unit distributed in the second quarter. Furthermore, Icahn intends to raise his stake in CVR Energy from 66% to around 81%. The last time IEP cut its dividend was in August 2023, when payouts were halved to $1 per unit.
IEP Plans to Raise Stake in CVR Energy
In order to boost its stake in CVR Energy, IEP intends to launch a tender offer to acquire up to 15 million additional CVR shares at $17.50 each. This offer price represents a 6% premium over CVR’s last closing price on November 7.
IEP’s decision to increase its stake in CVR Energy is “because it believes that CVR’s shares are undervalued in the market and represent an attractive investment opportunity, and that CVR shareholders will benefit from an opportunity to sell their shares at a premium to the trading price.”
IEP Reports Q3 Results
In addition, IEP reported third-quarter results with revenues of $2.79 billion, a 7% decline year-over-year, while its adjusted EBITDA dropped 25% year-over-year to $183 million. Furthermore, the fund’s net asset value stood at $3.6 billion as of September 30, reflecting a decrease of $423 million, partly due to CVR Energy’s poor performance.
Is IEP a Good Stock to Buy?
While none of the Wall Street analysts have covered IEP over the past three months, IEP stock has plunged by more than 15% over the past year.
