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Delek US Holdings to Acquire Remaining 18.4% of Outstanding Alon USA Units in USD 464m Stock Deal
Monday 13 November 2017

13 November 2017 - US-based downstream energy company Delek US Holdings, Inc. (NYSE: DK) and petroleum products refiner and marketer Alon USA Energy, Inc. (NYSE: ALJ) have inked a definitive merger agreement under which Delek US will acquire all of the outstanding Alon Partners common units representing limited partner interests which Delek US or its affiliates do not already own, in an all-stock for common units merger transaction, the companies said.

Delek US and its affiliates currently own approximately 51m common units of Alon Partners, or approximately 81.6% of the outstanding units.

Under terms of the merger agreement, the owners of the outstanding common units in Alon Partners that Delek US and its affiliates do not currently own will receive a fixed exchange ratio of 0.49 Delek US shares for each common unit of Alon Partners.

This implies a 5% premium to the 30 trading day volume weighted average ratio through and including November 7, 2017, of 0.4666 and a 2.9% premium to the ratio on November 7, 2017, which was the day before the parties announced this transaction.

The merger terms were negotiated, reviewed and approved by the conflicts committee of the board of directors of the general partner of Alon Partners.

The conflicts committee, which comprises independent members of the board of directors of Alon Partners' general partner, has unanimously approved the merger, the merger agreement and the related transaction.

As part of its evaluation process, the conflicts committee retained independent legal and financial advisors. The transaction was also approved by the board of directors of Delek US and, upon the recommendation of the conflicts committee, the board of directors of Alon Partners' general partner.

The transaction is expected to close in the first quarter of 2018. The approval and adoption of the merger agreement and the merger by Alon Partners requires approval by a majority of the outstanding Alon Partners common units.

A subsidiary of Delek US, which owns a sufficient number of Alon Partners common units to approve the merger on behalf of all Alon Partners public unitholders, has executed a support agreement in which it has irrevocably agreed to consent to the merger.

The closing of the merger is subject to customary closing conditions, including effectiveness of a registration statement on form S-4 related to the issuance of new Delek US shares to the Alon Partners' public unitholders and the listing of such shares on the NYSE.

No vote of Delek US stockholders is required.

Delek US Holdings is a diversified downstream energy company with assets in petroleum refining, logistics, asphalt, renewable fuels and convenience store retailing.

The refining assets consist of refineries operated in Tyler and Big Spring, Texas, El Dorado, Arkansas and Krotz Springs, Louisiana with a combined nameplate crude throughput capacity of 302,000 barrels per day.

Alon USA Partners is a Delaware limited partnership in which Delek US Holdings, Inc. (NYSE: DK) currently owns 100% of the general partner and approximately 81.6% of the limited partner interests.

The partnership owns and operates a crude oil refinery in Big Spring, Texas, with a crude oil throughput capacity of 73,000 barrels per day.

Barclays is serving as exclusive financial advisor and Baker Botts L.L.P. and Morris Nichols, Arsht and Tunnell LLP are serving as legal advisors on this transaction for Delek US. Houlihan Lokey is serving as exclusive financial advisor and Gardere Wynne Sewell LLP and Potter Anderson and Corroon LLP are serving as legal advisors for the conflicts committee of the board of directors of Alon Partners' general partner.
Details
Date Published: 13/11/2017
Target: Alon USA Energy/remaining 18.4%
Country: USA
Deal Size: 464m (USD)
Sector: Petroleum/Natural Gas/Coal
Type: Corporate acquisition
Financing: Stock
Status: Agreed
Vendor:
Buyer: Delek US Holdings
Buyer Advisor: Barclays , Baker Botts , Morris Nichols, Arsht and Tunnell
Comment:


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