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VeraSun’s Next Move?

Posted: February 9, 2009 at 09:10 AM CST

VeraSun Energy Corp. on Friday announced that Valero Energy Corp. could be a frontrunner to purchase much of the Sioux Falls, S.D.-based company’s assets. Plenty of rumors have circulated about possible buyers, whether it is several or all of VeraSun’s plants, but this is the first formal announcement of a potential suitor.

VeraSun announced it was seeking authority to sell substantially all of its assets and those of 24 of its affiliates. The company has signed an agreement with Valero Energy Corp. to sell assets related to VeraSun’s production facilities in Aurora, S.D.; Charles City, Fort Dodge and Hartley, Iowa; and Welcome, Minn.; along with a development site in Reynolds, Ind. Having entered into the Valero agreement, VeraSun is now required to hold an auction to determine if other bidders will offer more favorable terms than Valero’s bid.
Interested bidders must submit qualifying bids by March 13, 2009. If such bids are received, an auction would be held March 16.

Valero is a 29-year-old Fortune 500 company based in San Antonio. The company has approximately 22,000 employees and assets valued at $38 billion, according to its Web site. It is the largest refiner in North America with a refining network stretching across the continent.

“Given current difficult industry conditions and continued constrained credit markets, we believe that commencing a sale process is in the best interest of company stakeholders,” said Don Endres, VeraSun’s chief executive officer.

EPM will have more information available later today on its Web site. For now, the VeraSun release is available here: http://www.verasun.com/Press/details.cfm?ID=170.

-Dave Nilles