Giant Still Open for Better Offer
SCOTTSDALE, Ariz. -- Giant Industries approved a reduced offer from intended purchaser Western Refinings rather than wage an expensive court battle, the local oil company's leader said in a report by the Mesa, Ariz.-based East Valley Tribune.
However, CEO Fred Holliger said, as part of the newly renegotiated deal, Giant will get a 30-day reprieve to shop around for a better deal and pay a reduced breakup fee if the company finds one.
"We have a number of parties we want to talk to and determine what kind of interest we have," Holliger said in the report.
If he gets a better offer than Western's discounted deal, Giant will have to ante up $34 million, down from an original breakup fee of $37.5 million to back out of the Western transaction.
Holliger told Wall Street analysts, ostensibly on a conference call to discuss the local company's third-quarter financial performance, that the deal with the Texas oil company is back on track for an early 2007 closing, reported the East Valley Tribune.
El Paso-based Western Refining said in late August that it would buy the Scottsdale company for $83 a share plus debt assumption, a deal worth $1.5 billion. But Western said Monday it lowered its bid to $77 per share -- decreasing the value of the transaction by more than $100 million -- because of Giant's disappointing financial performance, spurred mostly by a couple of refinery fires and the ensuing boost in insurance coverage, the report stated.
Mark Cox, Giant's chief financial officer, said the company estimates property damage from recent fires at two of the refineries at about $30 million, but estimates for lost business at the still-disabled refineries has not been calculated, he said in the report. Both refineries are expected to be fully operational again within the next two months, according to Cox.
Giant said earnings for the quarter that ended Sept. 30 were $44 million -- down from $46.6 million for the same time period a year earlier -- but sales were up $80 million compared with the same period a year earlier.
The company's shares tumbled 5.8 percent to $76.25 Monday after the bad news about the merger leaked out, but gained back 20 cents Tuesday to close at $76.45, according to the report.
Giant operates three refineries, two wholesale gas distributors -- Phoenix Fuel and Dial Oil Co. -- a crude oil pipeline, a fleet of truck transports, and 153 retail stores/gas stations.
However, CEO Fred Holliger said, as part of the newly renegotiated deal, Giant will get a 30-day reprieve to shop around for a better deal and pay a reduced breakup fee if the company finds one.
"We have a number of parties we want to talk to and determine what kind of interest we have," Holliger said in the report.
If he gets a better offer than Western's discounted deal, Giant will have to ante up $34 million, down from an original breakup fee of $37.5 million to back out of the Western transaction.
Holliger told Wall Street analysts, ostensibly on a conference call to discuss the local company's third-quarter financial performance, that the deal with the Texas oil company is back on track for an early 2007 closing, reported the East Valley Tribune.
El Paso-based Western Refining said in late August that it would buy the Scottsdale company for $83 a share plus debt assumption, a deal worth $1.5 billion. But Western said Monday it lowered its bid to $77 per share -- decreasing the value of the transaction by more than $100 million -- because of Giant's disappointing financial performance, spurred mostly by a couple of refinery fires and the ensuing boost in insurance coverage, the report stated.
Mark Cox, Giant's chief financial officer, said the company estimates property damage from recent fires at two of the refineries at about $30 million, but estimates for lost business at the still-disabled refineries has not been calculated, he said in the report. Both refineries are expected to be fully operational again within the next two months, according to Cox.
Giant said earnings for the quarter that ended Sept. 30 were $44 million -- down from $46.6 million for the same time period a year earlier -- but sales were up $80 million compared with the same period a year earlier.
The company's shares tumbled 5.8 percent to $76.25 Monday after the bad news about the merger leaked out, but gained back 20 cents Tuesday to close at $76.45, according to the report.
Giant operates three refineries, two wholesale gas distributors -- Phoenix Fuel and Dial Oil Co. -- a crude oil pipeline, a fleet of truck transports, and 153 retail stores/gas stations.