Icahn pushes for board seats at Commercial Metals

AP News
Posted: Oct 19, 2011 8:26 PM
Icahn pushes for board seats at Commercial Metals

Commercial Metals Co. said Wednesday that billionaire investor Carl Icahn is pushing to have three associates elected to its board and do away with a shareholder rights plan that is blocking a hostile takeover of the struggling steel-parts company.

The announcement pushed the Irving-based company's shares up almost 6 percent in after-hours trading Wednesday.

Commercial Metals said that it had received notice that Icahn intends to nominate three people to its board at its 2012 annual meeting.

Icahn amassed an almost 10 percent stake in Commercial Metals this July after first buying up the stock last August. Days after his stake was revealed, the company adopted a so-called poison pill defense that would be triggered whenever any hostile acquirer gets a stake in the company exceeding 10 percent.

CEO Joe Alvarado said the board and management "always welcome constructive dialogue with stockholders and we regularly review all options for generating and delivering value."

"In what continues to be a challenging environment for the entire steel industry, we have taken aggressive steps to improve operational and financial performance regardless of market conditions," it said.

Earlier this month, Commercial Metals said it plans to sell or close a number of facilities, leading to the loss of 1,500 jobs, most of them at a steel pipe manufacturing plant in Croatia.

Icahn's nominees are James Unger, 63, the former CEO of American Railcar Industries Inc.; Steve Mongillo, 50, a private investor and director of American Railcar; and George Hebard, 38, a managing director at Icahn Capital. Icahn Capital is the majority owner of American Railcar.

Icahn also put several shareholder proposals forward, including ones that would require majority shareholder support for any poison pill and repeal the one the company enacted in July.