This Spin-off Has Proven Lucrative for Shareholders, Icahn Enterprises LP (IEP)

In late May of 2013, Energy executed a secondary offering of Refining shares at a fixed offer price of $30.75 per share. A total of 12 million shares changed hands as a result of this transaction. According to the release that announced the completion of the offering, Energy retains the right to offload another 1.8 million shares through its underwriter.

Post-deal performance

Since the completion of the initial spin-off, Energy’s shares have risen by more than 20%. This performance has roundly beaten the overall market’s gains and mirrors the 25% gain notched by Refining during the same time frame. Needless to say, this has provided some breathing room for Icahn Enterprises LP (NASDAQ:IEP) after an up-and-down fiscal year.

In fact, Icahn Enterprises LP (NASDAQ:IEP) recently announced a 25% increase in its annual shareholder distribution. Energy will also return capital to shareholders in the form of a $6.50 special dividend. This payout will apply to shareholders of record as on June 10, 2013 and should be completed by the end of the month.

More gains to be had?

Given the recent run-up, investors are rightly wondering whether the majority of these stocks’ “easy gains” have already been notched. This speculation has only increased with Energy’s special dividend announcement. While it is certain to be welcomed by the company’s shareholders, the payout could be construed as a tacit admission that the firm will become more dependent on yield increases and capital-return measures to attract new shareholders. Moreover, the secondary offering of Refining shares is likely to depress that company’s stock price in the short-term. However, both events could offer buying opportunities for keen-eyed investors.

In sum, CVR Energy, Inc. (NYSE:CVI) and CVR Refining have handsomely rewarded investors since Refining’s early-2013 spin-off. With Icahn Enterprises LP (NASDAQ:IEP) effectively controlling the decision-making processes in both firms’ boardrooms, it seems likely that there are more value-unlocking moves on the way. Such moves could include the potential sale of one or both of the firms. Investors would do well to place both companies on their watch-lists.

The article This Spin-off Has Proven Lucrative for Shareholders, Icahn Enterprises originally appeared on Fool.com and is written by Mike Thiessen.

Mike Thiessen has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Mike is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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