BioFuel, backed by investors David Einhorn and Daniel Loeb, is selling the plants in Fairmont, Minnesota, and Wood River, Nebraska, Green Plains said in a statement today. The combined capacity of the two distilleries is 220 million gallons a year, or about 14,000 barrels a day.
Green Plains soared 85 cents, or 5.7 percent, to settle at $15.72 in New York, posting the biggest gain since July. The shares have almost doubled in 2013. BioFuel sank 58 cents, or 18 percent, to $2.66, the largest decline in almost two years. The shares are down 28 percent in 2013.
“It looks like an interesting acquisition given the valuation implied,” said Matthew Farwell, a New York-based analyst at Imperial Capital LLC who holds an outperform recommendation on Green Plains. “The ethanol margin environment has improved due to the full corn harvest and ethanol’s discount to gasoline increased the appeal to blenders.”
BioFuel will transfer the plants to a group of lenders represented by First National Bank of Omaha as part of a defaulted loan of about $170.5 million of principal, according to the statement and information on its website. After the transfer is concluded, Green Plains will buy the plants from the group of lenders, according to the statement.
Hedge fund Greenlight Capital Inc., led by co-founder Einhorn, is Biofuel’s largest shareholder with a 26.2 percent stake, according to data compiled by Bloomberg. Third Point LLC, headed by Loeb, owns 19.2 percent.
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