BioFuel Energy (BIOF) Buys JBGL from Greenlight Capital

Shares of BioFuel Energy (BIOF) are surging by 36% in pre market after the company merged with JBGL, a company owned by Greenlight Capital.

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BIOFUEL ENERGY CORP. (BIOF) (the "Company") announced today that it has entered into a definitive agreement (the "Agreement") with certain affiliates of Greenlight Capital, Inc. ("Greenlight") and James R. Brickman ("Brickman") pursuant to which the Company will acquire the equity interests of JBGL Builder Finance LLC and certain subsidiaries of JBGL Capital, LP (collectively, "JBGL") from Greenlight and Brickman.  JBGL is a series of real estate entities involved in the purchase and development of land for residential purposes, construction lending and home building operations.  JBGL is currently owned and controlled by Greenlight and Brickman.

Pursuant to the terms of the Agreement, the Company will acquire JBGL for $275 million, payable in cash and Company common stock.  The cash portion of the purchase price will be funded from the proceeds of a $70 million rights offering to be conducted by the Company and approximately $150 million in debt financing provided to the Company by Greenlight.

In response to a proposal from Greenlight and Brickman on March 28, 2014, the board of directors of the Company formed a special committee of independent directors to evaluate the proposed transaction and possible alternatives for the Company.  The Company's board of directors, acting upon the unanimous recommendation of the special committee, approved the transaction, determined to exempt the transaction under the Company's Section 382 rights plan and resolved to recommend that the Company's stockholders vote to approve the transaction and related matters.  The special committee negotiated the terms of the transaction with the assistance of its legal and financial advisors.

David Einhorn, president of Greenlight Capital, Inc. and a director of the Company, said today, "though it is bittersweet that its original business plan did not pan out, I am excited about the transformation of the Company to a well positioned and successful development and homebuilding platform, which will enable it to capitalize on the value of its remaining assets."