Delek US To Buy 33.7 Mln Alon USA Shares From Alon Israel

(RTTNews) - Delek US Holdings Inc. (DK) said that it has entered into a definitive stock purchase agreement with Alon Israel Oil Company Ltd. to acquire about 33.7 million shares, or approximately 48 percent of the outstanding shares, of Alon USA Energy Inc. (ALJ) common stock owned by Alon Israel.

Prior to commencing negotiations with Alon Israel, Delek US entered into a stockholder agreement with Alon USA. During the first year following the closing of this transaction, the agreement allows Delek US to acquire up to 49.99 percent of the outstanding shares of Alon USA at its discretion, with additional ownership above this threshold subject to approval of Alon USA's board of directors. The stockholder agreement will expire on the first anniversary of the closing of this transaction, and Delek US will then have no further restrictions on ownership in Alon USA.

The consideration to be paid by Delek US to acquire the Alon USA common stock will consist of the issuance of 6.0 million shares of restricted Delek US common stock to Alon Israel, an unsecured $145.0 million promissory note payable to Alon Israel maturing in January 2021 and $200.0 million of cash that will be funded with a combination of cash on hand and borrowings on new or existing credit facilities. An additional 200,000 shares of Delek US common stock may be issued to Alon Israel under certain circumstances as outlined in the agreement. The approximate value of the transaction consideration is $572.4 million based upon a closing price of $37.90 per share of Delek US common stock on April 14, 2015.

The transaction is expected to close in the second half of May subject to customary governmental and other third party approvals.