US Holly, Frontier merge to form 440,000 bbl/day independent refiner

22 February 2011 19:36  [Source: ICIS news]

TORONTO (ICIS)--Holly and Frontier Oil have agreed to merge, forming a 440,000 bbl/day independent US refiner, the companies said on Tuesday.

The combined firm, to be named HollyFrontier, had an enterprise value of about $7.0bn (€5.2bn), they said.

Based in Dallas, Texas, HollyFrontier would serve the niche US mid-continent, Rocky Mountain and southwest refining markets. It would have access to growing regional domestic and Canadian crude oil supplies, the companies said.

Frontier CEO Mike Jennings would become president and CEO of the combined company while Holly CEO Matt Clifton would become executive chairman, they said.

Frontier has refineries in El Dorado, Kansas, and in Cheyenne, Wyoming.

Holly has refineries in Artesia, New Mexico; Tulsa, Oklahoma; and Woods Cross, Utah. The company is also a base oil supplier.

In related news, two Dallas-based law firms - Powers Taylor and The Briscoe Law Firm - said on Tuesday they were investigating potential claims against Frontier's board of directors as the planned stock-for-stock deal represented "a substantial discount" to Frontier's closing price in the days before the announcement of the merger.

Excluding a special dividend, the deal valued Frontier's shares at about $26.99, the law firms said in a statement.

Frontier's shares were priced $26.94, down 4.2% or $1.18 from Monday's closing price of $28.12, on the New York Stock Exchange at 13:48 New York time (18:48 GMT).

($1 = €0.74)

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By: Stefan Baumgarten
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