Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

PetroLogistics Investor Sues Over $2.1 Billion Koch Bid

June 3 (Bloomberg) -- PetroLogistics LP, a producer of propylene used to make paints and packaging, was sued by an investor claiming a $2.1 billion all-cash buyout offer from a unit of Koch Industries Inc. is too low.

Directors of PetroLogistics shouldn’t have agreed to the deal because it’s “unfair and inadequate,” Tom Klemesrud, a shareholder, said in a complaint filed yesterday in Delaware Chancery Court in Wilmington.

The buyout is designed to discourage rival offers, partly by barring Houston-based PetroLogistics from soliciting alternative proposals, Klemesrud said. He asked the court to block completion of the sale.

The acquisition provides Koch Industries’ Flint Hills Resources unit with a key raw material it uses at plants in Texas and Michigan for making polypropylene, a polymer found in bottle caps, auto parts, carpet and clothing.

“We believe this is a fair offer based on historic market values and the level of future investment that will be required to maintain and grow the business,” Jake Reint, a spokesman for Flint Hills, said in an e-mailed statement.

“The merger agreement also provides for a so-called ‘window-shop’ period during which PetroLogistics may consider other proposals,” Reint added.

PetroLogistics officials weren’t immediately available for comment. A receptionist at the company said she would refer the request to an outside public relations firm.

Shares of PetroLogistics rose 1 cent to $14.40 in trading in New York at 2:15 p.m.

The case is Klemesrud v. PetroLogistics, CA9723, Delaware Chancery Court (Wilmington).

To contact the reporters on this story: Steven Church in Wilmington, Delaware at schurch3@bloomberg.net; Dawn McCarty in Wilmington at dmccarty@bloomberg.net

To contact the editors responsible for this story: Andrew Dunn at adunn8@bloomberg.net Michael Hytha, Joe Schneider

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.