Icahn Takes Another Shot at XO Holdings
XO Holdings Inc. (XOHO) may have rebuffed Carl Icahn’s bid for $1.00 earlier, but the activist investor is betting that he can pick up the company at a discount this time.
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XO Holdings Inc. [[XOHO.OB]], a facilities-based telecom service provider that delivers an array of services, saw its shares jump more than 80% after ACF Industries offered to acquire all outstanding shares that it doesn’t own for $0.55 per share. The offer from Carl Icahn’s wholly owned subsidiary represents a premium of about 100% over Thursday’s closing price.
Carl Icahn’s ACF Industries already owns approximately 89% of all outstanding shares, which makes this transaction very likely to occur. Interestingly, shares continue to trade slightly below the proposed buyout price, at about $0.50 per share. However, this spread will likely narrow as the day goes on and the transaction becomes imminent.
Here is a copy of the letter:
Dear Carl:
As you know, Carl C. Icahn, the Chairman of XO Holdings, Inc. (the “Company”), beneficially owns a majority of the outstanding shares of the Company’s common stock (the “Common Stock”) through ACF Industries Holding Corp. (“ACF Holding”).
ACF Holding is interested in acquiring, either directly or through an affiliate, all of the shares of Common Stock which it does not own, in a transaction in which the acquirer merges with the Company, the exact form of the transaction to be determined jointly. Holders of Common Stock of the Company, other than ACF Holding and its affiliates, would receive consideration in the form of cash of $0.55 net per share, representing a premium of approximately 100% over the $0.28 market price of the shares as of the close of business on July 9, 2009. This transaction would not be subject to the acquirer’s ability to obtain financing or to the results of any due diligence review of the Company. We suggest that the definitive agreement relating to this transaction provide that, in addition to the vote required by law, the transaction be approved by the holders of a majority of the shares of Common Stock not held by Mr. Icahn or his affiliates.
Accordingly, ACF Holding hereby requests that you initiate the appropriate process so that the Company can commence reviewing and considering this proposal. In connection with the foregoing, please note that in no event is ACF Holding or its affiliates prepared to be a seller of its shares of Common Stock in any transaction and therefore it will not sell or transfer its shares to a third party or vote in favor of a transaction which involves the sale or transfer of its shares to a third party.
This letter shall not constitute a binding agreement between us and no agreement shall exist between us regarding the foregoing unless and until we enter into mutually satisfactory definitive agreements. Please do not hesitate to contact the undersigned at 212-702-4300 with any questions or comments.
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