Syntroleum says it received unsolicited offers

Syntroleum Corp., which owns half a biofuels plant in Geismar, said unsolicited offers to buy the company, its assets and intellectual property prompted the firm to begin looking at strategic alternatives to increase shareholder value.

Strategic alternatives generally include every available option, including selling a company.

Syntroleum announced July 17 it had hired Piper Jaffray & Co. for advice on the best strategy to improve the value of Syntroleum’s shares. At the time, Syntroleum, of Tulsa, Okla., said it would not update the evaluation process.

However, the company said Friday that media and investor inquiries prompted its explanation.

Piper Jaffray is now contacting additional companies to gauge their interest in Syntroleum’s assets. Syntroleum said there can be no assurances about which particular strategic alternative the company will choose.

One of Syntroleum’s major assets is half of the $160 million Dynamic Fuels plant in Geismar. The other half is owned by Tyson Foods, of Springdale, Ark.

The plant, which makes synthetic fuel from animal fat, has the capacity to make 75 million gallons of fuel a year. But the plant has had production problems and closed in October for a turnaround. The plant was scheduled to reopen in July. But the startup cost is $20 million, and Syntroleum would have to come up with half of that.

Syntroleum officials have declined to comment on whether the plant will resume operations.

Louisiana helped convince Syntroleum and Tyson to build the plant in Louisiana by offering around $30 million in tax breaks through a tax equalization program.

Louisiana Economic Development Secretary Stephen Moret said Monday that Syntroleum has not received the tax equalization credits or up-front breaks, just “earn-as-you-go” incentives, so no state dollars are at risk.

“Louisiana already has benefited from more than $140 million in capital investment and $9.5 million in cumulative payroll to date,” Moret said. “Obviously we are hopeful that the facility will restart operations once the future ownership of the facility has been resolved.”