The board of Getty Petroleum Marketing Inc. (GPM) said it will recommend the $5/share takeover offer made by Russia's OAO Lukoil earlier this year, even after receiving a second merger proposal from United Refining Co. Inc., through which GPM shareholders would have received $6/share.
The board decided Tuesday not to withdraw or modify its prior recommendation of Lukoil's $5/share cash offer, which expires Dec. 8. United Refining said it was "puzzled" by GPM's recommendation to reject its offer.
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 is less favorable to it than Lukoil's deal by $4.25 million.
As a precondition for its bid, United has requested reimbursement of its out-of-pocket expenses and management time if GPM consummates 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).
