Delek US Holdings, Inc.NYSE
Delek US Holdings: Conditions Aren't As Bad As They Look
Tristan R. Brown
Tristan R. Brown
Mon, Oct. 17, 9:05 AM
- Alon USA Energy (NYSE:ALJ) +12.4% premarket after confirming it received a buyout offer from Delek US Holdings (NYSE:DK) to acquire all ALJ's outstanding common shares at a fixed exchange ratio of 0.44 shares of DK stock for each outstanding share of ALJ.
- ALJ's Special Committee, which says it has reviewed a number of strategic alternatives, intends to consider DK's proposal and determine how to respond.
Fri, Oct. 14, 2:03 PM
Fri, Oct. 14, 8:47 AM
- Delek U.S. Holdings (NYSE:DK) offers to buy the ~53% of Alon USA Energy (NYSE:ALJ) it does not already own, in a deal that values ALJ at $516M.
- DK proposes to acquire the remaining ALJ shares in an all-stock transaction at a fixed exchange ratio of 0.44 DK shares for each outstanding ALJ share.
- Based on DK's closing price of $16.42, the offer works out to $7.22/share, a 16% discount to ALJ's $8.60 closing price.
- ALJ -1.2% premarket.
Tue, Oct. 11, 3:25 PM
- Oil refiners have lagged to the point that “value signals are getting investors interested," Credit Suisse says while cautioning that it wants to see global product inventories drawn down before buying shares, and the process is only just getting started.
- Nevertheless, the firm upgrades Tesoro (TSO +0.8%) and Alon USA Energy (ALJ +2.4%) to Outperform from Neutral, joining Marathon Petroleum (MPC -1.1%) and Western Refining (WNR +0.5%) as its favorites names in the group, while stressing that November-January is the typical entry point.
- Meanwhile, Credit Suisse downgrades PBF Energy (PBF -4.3%) and Delek USA (DK -3.6%) to Neutral; PBF has the largest macro sensitivity to refining and RINs, which are depressing PBF earnings at a time when net debt has been elevated after the Torrance and Chalmette acquisition, the firm notes.
Wed, Sep. 14, 2:52 PM
- Delek US Holdings (DK -1.8%) and Alon USA Energy (ALJ -0.1%) are initiated with Buy ratings, with respective $23.50 and $10 price targets, at Citigroup, which says a potential merger of the two companies seems increasingly likely and could unlock value.
- DK already owns a 48% stake in ALJ and recently sold its retail assets to COPEC, raising sufficient funds to acquire the remaining 52% stake via cash, Citi says.
- Besides the synergies in procurement of crude and marketing of products, the firm says the clearest synergy is $71M that ALJ outlined in EBITDA that could be dropped into DK’s MLP, a value that alone represents 100% of ALJ’s market cap.
Wed, Aug. 31, 9:48 AM
- Israel's Delek Group (OTCPK:DGRLY, DK) is considering New York, London or Amsterdam for an IPO of its stake in the Tamar natural gas field valued at $3B-$4B, Bloomberg reports.
- Delek has held talks with HSBC and JPMorgan Chase on a plan to spin off its 31% stake in the offshore field into a special-purpose company and sell shares on one of the overseas bourses, according to the report.
- Delek has five years to sell its Tamar holdings as part of an agreement reached with the government last year to resolve monopoly concerns.
Mon, Aug. 29, 8:24 AM
- Delek US Holdings (NYSE:DK) agrees to sell its 348 MAPCO Express gasoline stations and convenience stores to Compania de Petroleos de Chile for $535M.
- DK says the deal provides additional financial flexibility, which can be used to support Delek Logistics Partners (NYSE:DKL) as it explores growth opportunities.
- COPEC owns Chile's largest convenience store network with more than 900 owned and affiliated sites.
- DK says it will continue to supply fuel to certain MAPCO retail locations under an 18-month supply agreement.
Tue, Aug. 16, 4:42 AM
- Billionaire investor Carl Icahn has called on the EPA to make changes to the market for renewable fuel credits or else risk "the mother of all short squeezes" that could bankrupt refiners.
- "The RIN market is the quintessential example of a 'rigged' market where large gas station chains, big oil companies and large speculators are assured to make windfall profits at the expense of small and midsized independent refineries which have been designated the 'obligated parties' to deliver RINs."
- Related tickers: VLO, NTI, CLMT, MPC, TSO, ALDW, CVI, WNR, PBF, DK, HFC, CVRR, NTI, ALJ, TSO, WNR, PSX, XOM, PBF
Fri, Aug. 12, 2:02 PM
Fri, Aug. 12, 9:22 AM
Thu, Aug. 11, 6:57 PM
- Major U.S. refiners are on track to pay record amounts this year for credits to comply with U.S. renewable fuel rules, a trend that is bound to continue to hurt profits for the group, Reuters reports.
- A group of 10 refinery owners including Marathon Petroleum (NYSE:MPC) and Valero Energy (NYSE:VLO) spent at least $1.1B buying RINs, according to a Reuters review of their filings, placing them on track to surpass the annual record of $1.3B spent by the same group in 2013.
- RINs averaged ~$0.78 each during Q2, ~25% above the same period a year ago, according to the analysis, due to more ambitious targets from U.S. regulators on the volumes of ethanol required to be blended with gasoline.
- Other relevant tickers include PBF, CVRR, HFC, TSO, PSX, WNR, DK.
Thu, Aug. 11, 5:36 PM
Thu, Aug. 11, 5:30 PM
- Delek US (NYSE:DK) +12.8% AH following a NY Post report that Carl Icahn-controlled refiner CVR Energy (NYSE:CVI) is planning to make an offer for the company; CVI +9.2% AH.
- The report also speculates that Icahn, who sits on DK’s board, is building a personal stake in the company.
- Refiners have been hurt this year by narrowing oil spreads plus the rising price of RINs; DK has lost 39% and CVI has shed 65% YTD.
Wed, Aug. 3, 11:24 PM
Tue, Aug. 2, 5:35 PM
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Mon, Jul. 25, 12:56 PM
- Some U.S. refiners, stuck with the highest inventories of gasoline for this time of year in a quarter of a century, have started blending winter grade gasoline a month earlier than usual to sell later in the year, Reuters reports.
- Looking to cut costs, refiners and blenders reportedly are making an early move to mix cheap butane - a cheaper blending component than most other ingredients - to convert the summer barrels into winter barrels.
- Mixing more winter gasoline now threatens to worsen the glut later, but that's a risk willingly taken by an industry left with few other choices, the report says.
- Independent U.S. refiners are expected to post another quarter of weak earnings en route to possibly the worst year since the shale boom began in 2011.
- Refiners are broadly lower today as crude oil prices drop: PSX -1.6%, VLO -0.7%, MPC -2.3%, TSO -1.6%, HFC -0.7%, WNR -0.3%, PBF -1.5%, DK -0.6%, ALJ -1.7%.