As per the buyout proposal, Western Refining offered $17.50 in cash and 0.2266 of its share for each Northern Tier.
Western Refining acquired approximately 38% of the common units in Northern Tier from private equity firms TPG Capital Management and ACON Investments, in November 2013.
It also purchased 100% of the general partner that controls Northern Tier.
Upon completion of the deal, independent downstream energy company Northern Tier will be a wholly-owned subsidiary of Western Refining.
Western Refining president and CEO Jeff Stevens said: "We believe this proposed transaction enhances value for both the Western shareholders and NTI unitholders.
"The combination of Western and Northern Tier will simplify our corporate structure and create a stronger, more diverse company with enhanced growth opportunities and greater access to capital."
In order to fund the cash portion of the offer, Western is planning a combination of cash-on-hand, capital markets debt or a bank-sponsored bridge loan.
The proposed transaction is condition upon execution of a definitive agreement and approval of mutually acceptable definitive documentation as well as approval by the NTI Conflicts Committee, Western’s board of directors and the common unit holders of NTI.
Northern Tier operates a 97,800 barrels per stream day refinery located in St. Paul Park, Minnesota as well as various storage and transportation assets, including a light products terminal, a heavy products terminal, storage tanks, rail loading/unloading facilities, the Aranco and Cottage Grove pipelines and a Mississippi river dock.
Image: Western Refining’s main refinery in El Paso in Texas, US. Photo: courtesy of Dimples915/Wikipedia.
