Energy
Valero Takes the VeraSun Prize (VLO, ADM, VSUNQ)
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Valero Energy Corp. (NYSE:VLO) has won the auction for seven ethanol plants formerly owned by VeraSun Energy Corporation (VSUNQ), which is now in Chapter 11 bankruptcy. Valero will pay $477 million for the plants.
According to the AP, Archer Daniels Midland Inc. (NYSE:ADM) “participated” in the auction, but did not buy anything. ADM must be too busy looking at Brazilian sugar-cane ethanol producers.
Three other lender groups submitted bids totaling $576 million for other VeraSun refineries and properties. Valero will operate its new ethanol refineries through its Valero Renewable Fuels subsidiary.
Valero’s 52-week range is $13.94-$55/share. Shares closed at $18.50 yesterday. Buying ethanol refineries is likely to keep the price down closer to the bottom than to the top of that range.
Paul Ausick
March 18, 200
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