Holly Energy Partners, L.P. Acknowledges HF Sinclair Corporation’s Proposal to Acquire its Outstanding Common Units
May 04 2023 - 6:00AM
Business Wire
Holly Energy Partners, L.P. (NYSE: HEP) (the “Partnership” or
“HEP”) announced today that it has received a non-binding proposal
letter from HF Sinclair Corporation (NYSE: DINO) (“HF Sinclair”) to
acquire all of the outstanding common units (“Common Units”) of HEP
not beneficially owned by HF Sinclair or its affiliates in exchange
for shares of common stock, par value $0.01 per share (“Common
Stock”), of HF Sinclair. Under the proposal, HF Sinclair proposes
to effect the transaction at a fixed exchange ratio of 0.3714 newly
issued shares of Common Stock per each publicly held Common Unit,
which was derived using the 30-day volume weighted average prices
for each security as of market close on May 3, 2023 (the “Proposed
HF Sinclair Transaction”).
The proposal has been made to the board of directors of the
ultimate general partner of HEP (the “Board”). It is anticipated
that the Board will authorize the Conflicts Committee of the Board
(the “Conflicts Committee”), which is comprised of independent
members of the Board, to review, evaluate and negotiate the
Proposed HF Sinclair Transaction. The Proposed HF Sinclair
Transaction is subject to the negotiation and execution of a
definitive agreement. There can be no assurance that a definitive
agreement will be executed or that any transaction will be approved
or consummated.
Cautionary Statement Regarding Forward-Looking
Statements:
This press release contains various “forward-looking statements”
within the meaning of the federal securities laws. These
forward-looking statements are identified as any statement that
does not relate strictly to historical or current facts. When used
in this press release, words such as “anticipate,” “project,”
“expect,” “will,” “plan,” “goal,” “forecast,” “strategy,” “intend,”
“should,” “would,” “could,” “believe,” “may,” and similar
expressions and statements regarding our plans and objectives for
future operations or the Proposed HF Sinclair Transaction are
intended to identify forward-looking statements. These
forward-looking statements are based on our beliefs and assumptions
and those of our general partner using currently available
information and expectations as of the date hereof, are not
guarantees of future performance and involve certain risks and
uncertainties, including those contained in our filings with the
Securities and Exchange Commission (the “SEC”). Although we and our
general partner believe that such expectations reflected in such
forward-looking statements are reasonable, neither we nor our
general partner can give assurance that our expectations will prove
to be correct. All statements concerning our expectations for
future results of operations are based on forecasts for our
existing operations and do not include the potential impact of any
future acquisitions. Our forward-looking statements are subject to
a variety of risks, uncertainties and assumptions. If one or more
of these risks or uncertainties materialize, or if underlying
assumptions prove incorrect, our actual results may vary materially
from those anticipated, estimated, projected or expected. Certain
factors could cause actual results to differ materially from
results anticipated in the forward-looking statements. These
factors include, but are not limited to:
- the negotiation and execution, and the terms and conditions, of
a definitive agreement relating to the Proposed HF Sinclair
Transaction and the ability of HF Sinclair or HEP to enter into or
consummate such agreement;
- the risk that the Proposed HF Sinclair Transaction does not
occur;
- negative effects from the pendency of the Proposed HF Sinclair
Transaction;
- failure to obtain the required approvals for the Proposed HF
Sinclair Transaction;
- the time required to consummate the Proposed HF Sinclair
Transaction;
- the focus of management time and attention on the Proposed HF
Sinclair Transaction and other disruptions arising from the
Proposed HF Sinclair Transaction;
- the demand for and supply of crude oil and refined products,
including uncertainty regarding the effects of the continuing
COVID-19 pandemic on future demand and increasing societal
expectations that companies address climate change;
- risks and uncertainties with respect to the actual quantities
of petroleum products and crude oil shipped on our pipelines and/or
terminalled, stored or throughput in our terminals and refinery
processing units;
- the economic viability of HF Sinclair, our other customers and
our joint ventures’ other customers, including any refusal or
inability of our or our joint ventures’ customers or counterparties
to perform their obligations under their contracts;
- the demand for refined petroleum products in the markets we
serve;
- our ability to purchase operations and integrate the operations
we have acquired or may acquire, including the acquired Sinclair
Transportation Company LLC business;
- our ability to complete previously announced or contemplated
acquisitions;
- the availability and cost of additional debt and equity
financing;
- the possibility of temporary or permanent reductions in
production or shutdowns at refineries utilizing our pipelines,
terminal facilities and refinery processing units, due to
reductions in demand, accidents, unexpected leaks or spills,
unscheduled shutdowns, infection in the workforce, weather events,
civil unrest, expropriation of assets, and other economic,
diplomatic, legislative, or political events or developments,
terrorism, cyberattacks, or other catastrophes or disruptions
affecting our operations, terminal facilities, machinery, pipelines
and other logistics assets, equipment, or information systems, or
any of the foregoing of our suppliers, customers, or third-party
providers or lower gross margins due to the economic impact of the
COVID-19 pandemic, inflation and labor costs, and any potential
asset impairments resulting from or the failure to have adequate
insurance coverage for or receive insurance recoveries from, such
actions;
- the effects of current and future government regulations and
policies, including the effects of current and future restrictions
on various commercial and economic activities in response to the
COVID-19 pandemic and increases in interest rates;
- delay by government authorities in issuing permits necessary
for our business or our capital projects;
- our and our joint venture partners’ ability to complete and
maintain operational efficiency in carrying out routine operations
and capital construction projects;
- the possibility of terrorist or cyberattacks and the
consequences of any such attacks;
- uncertainty regarding the effects and duration of global
hostilities, including the Russia-Ukraine war, and any associated
military campaigns which may disrupt crude oil supplies and markets
for refined products and create instability in the financial
markets that could restrict our ability to raise capital;
- general economic conditions, including economic slowdowns
caused by a local or national recession or other adverse economic
condition, such as periods of increased or prolonged
inflation;
- the impact of recent or proposed changes in the tax laws and
regulations that affect master limited partnerships; and
- other financial, operational and legal risks and uncertainties
detailed from time to time in our SEC filings.
About Holly Energy Partners, L.P.:
Holly Energy Partners, L.P., headquartered in Dallas, Texas,
provides petroleum product and crude oil transportation,
terminalling, storage and throughput services to the petroleum
industry, including subsidiaries of HF Sinclair Corporation. HEP,
through its subsidiaries and joint ventures, owns and/or operates
petroleum product and crude pipelines, tankage and terminals in
Colorado, Idaho, Iowa, Kansas, Missouri, Nevada, New Mexico,
Oklahoma, Texas, Utah, Washington and Wyoming, as well as refinery
processing units in Kansas and Utah.
Additional Information and Where You Can Find It
This release does not constitute a solicitation of any vote or
approval with respect to the Proposed HF Sinclair Transaction. This
release relates to a proposed business combination between HF
Sinclair and HEP. In connection with the Proposed HF Sinclair
Transaction, subject to further developments and if a transaction
is agreed, HF Sinclair and HEP expect to file a proxy statement and
other documents with the SEC. INVESTORS AND SECURITYHOLDERS OF HF
SINCLAIR AND HEP ARE ADVISED TO CAREFULLY READ ANY PROXY STATEMENT
AND ANY OTHER DOCUMENTS THAT HAVE BEEN FILED OR MAY BE FILED WITH
THE SEC (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) IF AND
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED HF SINCLAIR TRANSACTION, THE PARTIES
TO THE PROPOSED HF SINCLAIR TRANSACTION AND THE RISKS ASSOCIATED
WITH THE PROPOSED HF SINCLAIR TRANSACTION. Any definitive proxy
statement, if and when available, will be sent to securityholders
of HF Sinclair and HEP relating to the Proposed HF Sinclair
Transaction. Investors and securityholders may obtain a free copy
of such documents and other relevant documents (if and when
available) filed by HF Sinclair or HEP with the SEC from the SEC’s
website at www.sec.gov. Securityholders and other interested
parties will also be able to obtain, without charge, a copy of such
documents and other relevant documents (if and when available) from
HF Sinclair’s website at www.hfsinclair.com under the Investor
Relations tab or from HEP’s website at www.hollyenergy.com on the
Investors page.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation, or sale would
be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Participants in the Solicitation
HF Sinclair, HEP and their respective directors, executive
officers and certain other members of management may be deemed to
be participants in the solicitation of consents in respect of the
Proposed HF Sinclair Transaction. Information about these persons
is set forth in HF Sinclair’s proxy statement relating to its 2023
Annual Meeting of Stockholders, which was filed with the SEC on
April 6, 2023; HF Sinclair’s Annual Report on Form 10-K for the
year ended December 31, 2022, which was filed with the SEC on
February 28, 2023; HEP’s Annual Report on Form 10-K for the year
ended December 31, 2022, which was filed with the SEC on February
28, 2023, and subsequent statements of changes in beneficial
ownership on file with the SEC. Securityholders and investors may
obtain additional information regarding the interests of such
persons, which may be different than those of the respective
companies’ securityholders generally, by reading the proxy
statement and other relevant documents regarding the Proposed HF
Sinclair Transaction (if and when available), which may be filed
with the SEC.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230504005480/en/
Holly Energy Partners, L.P.
Craig Biery, 214-954-6510 Vice President, Investor Relations
or
Trey Schonter, 214-954-6510 Manager, Investor Relations
Holly Energy Partners (NYSE:HEP)
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