Frontier Oil seeks voluntary delisting from New York Stock Exchange

Frontier, which was established as Wainoco Oil in 1949, has grown into a refining and marketing company operating into the Rocky Mountain and Plain States areas.

Frontier Oil Corporation is headquartered in Houston, Texas and its subsidiary, frontier Refining & Marketing Inc has its headquarters in Denver, Colorado.

The announcement about the merger had already been made when the two companies entered into an agreement on Feb, 21, 2011 according to which both the companies will merge into an all stock merger of equal transactions.

As per the merger agreement, each share of Frontier will get changed into 0.4811 shares of Holly Corp., once the merger is complete. After delisting, Frontier will be able to end the registration of its common stock as per section 12 of the Exchange Act and can get out of the cyclical reporting system of the SEC. The common stock will not be listed on any other exchange or used for quotation, requires the Act.

Frontier will also pay a special dividend of 28 cents along with the regular dividend of 6 cents.

Frontier operates two refineries, the 135,000 bpd refinery in El Dorado, Kansas and the 52,000 bpd in Cheyenne, Wyoming. Its Wyoming refinery is near the oil fields of a geological formation called the Bakken shale which provides a cheaper access to supply as compared to its rivals.

The merger will create the HollyFrontier Corporation which will have an enterprise value of $7 billion and make the new company one of the largest refiners operating in Rocky Mountain, Midwest and Southwest.

After the merger Holly shareholders will own about 51 percent share in the new company and the rest will be owned by Frontier shareholders.

In a joint statement, Holly’s Chairman and Chief Executive, Matthew P. Clifton and Michael C. Jennings, chairman and chief executive of Frontier said, “Frontier and Holly are two of the most profitable, publicly traded independent refining companies. Together we will be one of the largest independent refiners in the U.S.”

The companies also expect annual savings of $30 million by cutting expenses and through operational efficiency.

The shares of Holly closed at $56.11 on Friday. That made the market value of $2.99 billion for the company.

The new company will be headquartered in Dallas, Texas where presently Holly has its headquarters.