Alon USA Partners, LP (ALDW)

[pete807]

jugs as you know I am an eagle eye on detail of these deals stemming from the acquisition of 1/3 of the tiny MLP independent refinery universe last year by a company now being acquired by the big player, namely Tesoro. In the end I will gain about 130 shares of the giant through the process. I will eclipse the initial cash deal in the first transaction by nearly a double but sacrifice the use of the money for about 1/2 year and accept small dividend along the way. it only involved 1/5 of my stake and the majority of the investment was returned in distributions and selling ahead of the closing of the merger. There was modest gain albeit no where near proper value, imo.

The reasons to be vigilant are simple: The lesson was learned when the entity wanting to acquire at discount even though only holding 38% of the units was aided by too big to fail banks that held enough units in a division that should be separate to their banking function, to use in loan leverage to swing the 38% to above 50% voting in the deal. Bottom line is the vote didn't matter and the outcome was in stone before we even were formally given "choice".

All this matters because while you stated:

nowhere is ALDW mentioned other than for its being majority controlled by the soon-to-be General Partner controlling interest

but the press release states:

noncontrolling interest in Alon USA Partners

We have learned it does not matter in this world of big banking... as the leverage exists either way.

I will be happy if Delek drops assets into the MLP, but not surprised if it goes the way of the deal I mentioned above. Remember for a brief time Alon was going to add another refinery into the MLP and then changed it's mind.
-pete