CVR REFINING (CVI)

[michaelmerriman]

IEP dumps 250,000 shares today. What do you all make of this? Seems awfully fishy to me.

SEC Filing

On August 2, 2016, Icahn Enterprises Holdings sold 250,000 Common Units. After such sale, the General Partner and its affiliates (including the Reporting Persons) collectively own 69.99% of the Common Units. Pursuant to the Partnership Agreement, the fact that the General Partner and its affiliates have reduced their ownership percentage below 70% means that the ownership threshold for the General Partner's call right has been permanently reduced from 95% to 80%. Accordingly, if at any time the General Partner and its affiliates (including the Reporting Persons) own more than 80% of the Common Units (reduced from 95%) the General Partner will have the right, but not the obligation, to purchase all, but not less than all, of the Common Units held by unaffiliated unitholders at a price not less than their then-current market price, as calculated pursuant to the terms of the Partnership Agreement. The General Partner is not obligated to obtain a fairness opinion regarding the value of the Common Units to be repurchased by it upon exercise of the call right. The General Partner may use its own discretion, free of fiduciary duty restrictions, in determining whether to exercise this right.

The Reporting Persons reduced their ownership percentage below 70% in order to permanently reduce the ownership threshold for the General Partner's call right to 80% to provide them flexibility should the General Partner determine to seek to exercise such right in the future. The Reporting Persons have no current plans or proposals relating to or that would result in the acquisition of additional Common Units or an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Partnership or any of its subsidiaries.

Probably not a good sign but I'm not sure I understand the finer points of the 80% GP threshold for call rights. Looks like they might be making some sort of play to get back to 80% ownership then purchase all outstanding common units at this stupidly cheap price. Sounds pretty fucking bullshit to me unless I've got the language and mechanisms twisted. My $7.34 cost basis might get stolen for $5.60 a share before the next few distributions come through and bring the share price back up. Someone please tell me I'm wrong?