Greenlight Capital Increases BioFuel Stake, Submits Proposal ~ market folly

Monday, March 31, 2014

Greenlight Capital Increases BioFuel Stake, Submits Proposal

David Einhorn's hedge fund Greenlight Capital has filed an amended 13D on shares of BioFuel Energy (BIOF).  Per the filing, Greenlight discloses a 35.5% ownership stake with over 2.2 million shares.  This is an increase of 784,205 shares since their last disclosure.  The filing was made due to activity on March 28th.

Einhorn and real estate investor Jim Brickman submitted a non-binding proposal to BioFuel's board to acquire the company for $275 million in cash and stock.  The proposal basically involves one (or more) newly created subsidiaries acquiring equity interests in JBGL, a real estate developer (JBGL is owned by Brickman & Greenlight).

You can read the entire proposal via the SEC here.  Shares of BIOF rocketed higher on the news.

Per Google Finance, BioFuel Energy is "a holding company. The Company produces and sells ethanol and its co-products (primarily distillers grain and corn oil), through its two ethanol production facilities located in Wood River, Nebraska and Fairmont, Minnesota. The Company’s ethanol plants are owned and operated by the Operating Subsidiaries of the LLC."

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