Tesoro is nearly 12% higher (jumping above the $64-per-share cash offer) this morning after a report surfaced the takeover king Kirk Kerkorian has disclosed a plan to buy a minority interest in the company, which would carry a price tag of $1.4 billion. The offer from Kerkorian's Tracinda Corp. is for 28.75 million shares, which represents a 16% stake. Kerkorian noted in a statement, Tracinda believes that the fundamentals of the petroleum refining industry make it an attractive are for investment. Tracinda has chosen to invest in Tesoro because Tracinda believes that the company is well positioned within the industry and has a management team that is effectively executing its strategic plan. Tracinda looks forward to participating in the growth of the company alongside the other shareholders.
The new offer from Kerkorian, who currently owns 5.5 million shares of TSO, is a12% premium over TSO's closing price of $57.20 per share from yesterday. This offer comes as oil has tagged record prices of more than $90 per barrel, which has helped squeeze margins as the price of products like gas have not kept up. Currently, TSO is trading at $63.62 per share.