The board of directors of Getty Petroleum Marketing Inc. (GPM) approved an offer by Russia's OAO Lukoil to acquire GPM shares at $5/share cash, turning down a counteroffer made by United Refining �. Inc.
Board members said they had determined that Lukoil's offer would better meet interests of GPM shareholders given the value, timing, and certainties as to completion provided by Lukoil.
The GPM board said Tuesday they would recommend the $5/share takeover offer made by Lukoil earlier this year after receiving a second merger proposal from United Refining through which GPM shareholders would have received $6/share (OGJ Online, Dec. 6, 2000).
Earlier this week, United Refining said it was willing to counter an offer by OAO Lukoil to acquire GPM by increasing its offer to $6/share cash from $5.75/share (OGJ Online, Dec. 5, 2000). It also said it would accept a "less favorable lease arrangement" with Getty Realty, GPM's sister real estate affiliate. United said the altered real estate deal would have been less favorable to it than Lukoil's deal by $4.25 million.
As a precondition for its bid, United Refining had requested reimbursement of its out-of-pocket expenses and management time if GPM consummated a transaction with Lukoil at a price higher than $5.
OAO Lukoil said last month it would acquire GPM, one of the largest independent US marketers of gasoline and petroleum products, in a $71 million cash deal (OGJ Online, Nov. 3, 2000). GPM supplies a retail chain that comprises 1,300 filling stations located in thirteen Northeastern and Mid-Atlantic states. GPM also markets heating oil and other petroleum products.
