PetroLogistics Moving Up Following Acquisition At 8% Premium

PetroLogistics (NYSE: PDH) shares are up almost 10 percent in Wednesday’s pre-market, after the company agreed to be acquired by Flint Hills Resources (a subsidiary of Koch Industries) for $14 per share.

The CEO and two major investors, who own 73 percent of outstanding shares, are to receive just $12 per share. This is 7.19 percent below Tuesday’s closing price, whereas the $14 price for other shareholders is 8.28 percent above Tuesday’s close.

The acquisition will add propane dehydrogenation, a materials processing business, to the Koch enterprise. This is the only propane dehydrogenation facility in the country. Flint Hills CEO Brad Razook commented on the strength of PetroLogistics’ business and synergies between the firms:

“PetroLogistics built this facility from the ground up. It is a world-class operation. Its capabilities are well aligned with our existing chemical and refining business. We look forward to welcoming PetroLogistics employees to Flint Hills Resources as we work together to build on their success."