(Sioux Falls, S.D.)– There are some signs that Wall Street anticipates a takeover of Verasun Energy based out of Sioux Falls.
Monday, when the DOW Jones Industrial average lost 778 points, Verasun’s stock jumped more than 80 percent–to four dollars per share.
Verasun ended Tuesday’s trading at $3.13 per share, down almost 22 percent from Monday’s close.
With slim profit margins already weighing on the biofuels industry, Verasun this month found itself in a liquidity crisis after locking in at higher-than-market prices for corn that it turns into ethanol.
Verasun said several companies have expressed a “strategic interest,” a phrase typically associated with buyouts or a substantial sale of assets.
One analyst says a company would have to be of decent size to take on Verasun’s assets and debt–and that some possibilities include privately held ethanol producer Poet or agribusiness giants Archer Daniels Midland or Cargill.
Locally, Verasun owns and operates ethanol plants in Hartley and Welcome, Minnesota.
(Story from the Associated Press.).
