NuStar (NYSE:NS) stock is rising higher on Monday as investors celebrate a $7.3 billion deal with Sunoco (NYSE:SUN) for the fuel transportation company.
The deal has Sunoco acquiring NuStar by offering 0.4 shares of SUN stock for each share of NS stock that investors hold. This represents a 24% premium for the shares based on the 30-day volume-weighted average price of both shares as of Friday’s close.
NuStar and Sunoco’s Boards of Directors have both given their unanimous support to the deal. So long as they get approval from regulators and shareholders, the acquisition should close in the second quarter of 2024.
To go along with this, NuStar has acquired a $1.6 billion 364-day bridge term loan to refinance its “Series A, B and C Preferred Units, Subordinated Notes, Revolving Credit Facility, and Receivables Financing Agreement.” The company is also paying a 21 cents per share cash distribution to shareholders before the deal closes.
NS Stockholder Reactions to the Deal
News of the deal with Sunoco has shares of NS stock seeing heavy trading on Monday. That has more than 5 million shares changing hands as of this writing. For the record, its daily average trading volume is about 647,000 shares.
NS stock is up 15.2% as of Monday morning.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
