Delek US Holdings, a Brentwood, Tennessee-based downstream energy company, is pushing back at what it describes as a proxy contest coordinated by CVR Energy, a competitor controlled by investor Carl Icahn.

What Happened: CVR acquired a 15% stake in Delek last year and is its largest shareholder; Icahn owns 70% of CVR. In January, CVR CEO David L. Lamp sent a letter to Delek Chairman and CEO Uzi Yemin proposing the replacement of three directors with a trio of CVR nominees, to be voted upon during Delek’s shareholder’s meeting on May 6.

“Delek desperately needs new strategic direction,” Lamp wrote. “We would like to work collaboratively with you to replace three of your nominees at Delek’s upcoming 2021 Annual Meeting.”

On April 8, CVR filed a lawsuit against Delek, claiming that the CEO’s total compensation of $81 million over the last eight years was “eye-popping” and was never properly disclosed to shareholders, adding that “Yemin is a poster boy for all that is wrong with corporate governance in America.”

What Else Happened: Although Lamp claimed CVR had no intention to launch a takeover, Delek insisted that is not true. The company released a new shareholder letter and a fact sheet filed with the U.S. Securities and Exchange Commission that said Sugar Land, Texas-based CVR was eager to acquire rival Delek.

To achieve its results, Delek continued, CVR was following “Carl Icahn’s decades-old playbook of nominating friends and colleagues and making a range of misleading statements and half-truths to ‘see what sticks’ as it seeks to get its nominees elected.”

Delek refuted the lawsuit’s claims, insisting the litigation was meritless and CVR sought to “obtain information that is inappropriate to share with a competitor.”

Delek’s statement also asserted that CVR claims of a badly-run company were senseless because “Delek’s total shareholder return (TSR) over the past 5 years is 78% versus 6% for CVR.”

The Delek shareholder letter encouraged the company’s stakeholders to stay the course with the current board membership while depicting CVR as a “competitor whose interests are not aligned with those of Delek’s shareholders” … which is “pursuing tactics from the Icahn playbook to advance [its] self-serving agenda.”

This story originally appeared on Benzinga. © 2021 Benzinga.com.

Benzinga does not provide investment advice. All rights reserved.

Photo: Delek US

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