HF Sinclair to buy remaining stake in Holly Energy

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by Reuters

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HF Sinclair to buy remaining stake in Holly Energy

Aug 16 (Reuters) - HF Sinclair (DINO.N) will acquire all the outstanding shares of smaller oil pipeline operator Holly Energy Partners (HEP.N) that it does not already own in a cash and stock deal, the companies said on Wednesday.

Holly Energy shareholders will receive 0.315 shares and $4 for every share held, which represents a premium of 2% to Holly's last closing price. HF Sinclair holds 47.16% of Holly Energy, as per Refinitiv data.

The oil and gas industry has financed billions of dollars in pipeline and storage products under Master Limited Partnerships (MLPs) since former President Ronald Reagan signed legislation in 1986, allowing them as a way to spur energy investment.

The U.S. refining and midstream industries have consolidated in recent years, a process which accelerated after the coronavirus pandemic drastically reduced demand for transportation fuels.

Separately, HF Sinclair's board of directors has authorized $1 billion in share buybacks.

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