BioFuel Energy Corp. (NASDAQ:BIOF) shares have soared since David Einhorn’s firm Greenlight Capital made a bid in March to acquire it for $275 million. The stock climbed again last month after BioFuel announced that it had approved Greenlight’s proposal. Now the company has announced that it will remain public and listed on the NASDAQ after the deal closes, assuming a number of requirements are met.
BioFuel announces favorable listing determination
In a press release on Wednesday, BioFuel Energy said the NASDAQ sent a written decision regarding its request to remain listed on the NASDAQ Capital Market after the transaction. The stock exchange decided to grant the request, assuming that two conditions are met.
First, BioFuel Energy must close the transaction with JBGL Builder Finance and some subsidiaries of JBGL Capital with some of Greenlight Capital’s affiliates and JBGL co-founder James Brickman by Nov. 4. Second, the combined company that results after the transaction must satisfy all of the requirements for an initial listing on the NASDAQ.
BioFuel said it is working on completing the transaction and those related to it. That includes the preparation of a listing application for the merged company for the NASDAQ listing. Of course there is still a chance that all of this will fall through, but the company seems confident that everything will be in order, according to its press release.
Einhorn seeks to restructure BioFuel Energy
After the transactions are complete, David Einhorn’s Greenlight Capital will hold nearly half of BioFuel energy. However, the structure of the deal is such that BioFuel is actually the one making the acquisition. The $275 million cash and stock deal includes a $70 million rights offering and a $150 million loan from Greenlight Capital. After the deal closes, Greenlight will hold a 49.9% stake in BioFuel Energy, while JBGL co-founder James Brickman will hold an 8.4% stake. Brickman will be CEO of the combined company.
Shares of BioFuel Energy slumped more than 4% during regular trading on Wednesday.