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Alon USA Partners, LP Message Board

  • livfortrips livfortrips Nov 7, 2013 10:26 AM Flag

    takeover target???

    very possible at this time...

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    • "There are other MLPs that are ripe for picking as they have good business operations and positive cash flows. The industry could see 2014 as the year of realigning MLPs to gain a foot hold in new areas, to restructure or expand operations.

      One MLP that comes to mind quickly is Alon USA Partners (ALDW), with its parent company of Alon USA Energy (ALJ) would make the perfect target. Alon USA Energy owns the general partner and 81.6% of Alon USA Partners. The company is the largest 7-Eleven licensee in the U.S. with 298 retail gasoline/convenience stores in Central and West Texas. So the company could present an attractive target. With a market capitalization of $835 million for Alon USA Partners and $785 million for Alon USA Energy, the two would be a tidy acquisition considering Northern Tier is currently worth around $2.4 billion.

      Alon USA Partners reported a loss last quarter (which was due to a fire at the refinery). This depressed the unit price valuation since the fire in September 2013. The refinery has since been repaired and back to full operational status. Opportunistic buyers could take advantage of this as the company returns to profitability in the fourth quarter, 2013 and beyond."

      Hot buys in 2014

      • 1 Reply to wareham2620
      • Same yet different.....I own a bit of both, you drive by the Big Spring facility, you get the feeling it is like an older house, you drive or fly over The Rosemount MN NTI plant and you get the opposite feeling. Is a shinier well lighted plant superior to one that isn't, IDK

        One has got a lock on cheap railed in bakken to a degree, and the other is WTI Permian basin,
        both got retail chain and both are structured similarly though, gas is cheaper in west texas than Mpls so maybe some pricing power...Upper Midwest gets short diesel every fall due to farming and trucking for the bakken, prices get really high...

        Personally, thinking NTI is better deal but ALDW and parent especially look cheap for someone to buy but not sure if that would be that exciting for ALDW owners...........

    • Buying refineries is not hot these days. ALDW is a small rural market, not attractive. The US gasoline market will not expend soon, the diesel is for export. Inland refineries depend on crack spread for profits. I would not be surprise if the majors refineries dump their excess gasoline production in the mid-west markets. This will not be that good for the inland refiners.

    • kaps1992 Nov 7, 2013 11:52 AM Flag

      I may be incorrect but I believe the buyer would have to buy the parent of ALDW.

      • 1 Reply to kaps1992
      • They would need the parent to be willing to sell.
        It is very unlikely for ALDW itself (as distinct from the parent) to be sold as a c-corp would not want to buy an MLP because assets are valued much higher in an MLP (due to tax advantages).

        With NTI, it was not NTI which was bought but the parent's stake and GP interest in NTI. NTI itself was not sold but just moves from one controlling party to another.

        Bottom line: ALDW itself is very unlikely to be bought.

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