By Lisa Kerner
Charlotte, N.C., Nov. 29 - The boards of directors of VeraSun Energy Corp. and US BioEnergy Corp. approved a merger of equals of the two companies.
The combined company will operate under the VeraSun name. It is expected to have a market capitalization of about $1.5 billion with nine operating ethanol production facilities and another seven under construction.
Under the merger agreement, 0.81 of a share of VeraSun common stock will be issued for each outstanding share of US BioEnergy common stock, a premium of some 11% based on Nov. 23 closing prices.
The transaction is slated to close in the first quarter of 2008, according to a news release.
Major shareholders of both companies have agreed to vote in favor of the deal.
VeraSun chairman, chief executive officer and president Donald L. Endres will lead the combined company. US BioEnergy president and CEO Gordon Ommen will become chairman. Danny C. Herron, VeraSun senior vice president and chief financial officer, will become president of the combined company.
"This merger is an opportunity for two leading companies in the renewable fuels industry to capitalize on synergies and provide value for shareholders," Endres said in the release. "It also underscores the commitment of each company to execute on its growth strategy to become a large-scale, low-cost ethanol producer."
VeraSun was advised by Morgan Stanley & Co. Inc. and Cravath, Swaine & Moore LLP. UBS Securities LLC and Skadden, Arps, Slate, Meagher & Flom LLP advised US BioEnergy.
US BioEnergy is a St. Paul-based producer and marketer of ethanol and distillers grains.
VeraSun, based in Brookings, S.D., produces renewable fuel.
| Acquirer: | VeraSun Energy Corp.
|
| Target: | US BioEnergy Corp.
|
| Announcement date: | Nov. 29
|
| Transaction total: | $1.5 billion
|
| Price per share: | 0.81 of a VeraSun share
|
| Expected closing: | First quarter of 2008
|
| Stock price for acquirer: | NYSE: VSE: $10.64 on Nov. 28
|
| Stock price for target: | Nasdaq: USBE: $8.03 on Nov. 28
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
