According to the Complaint, Andeavor engages in the refining and marketing of petroleum products. It operates through the following segments: Refining, Logistics, and Marketing. The Refining segment buys and refines crude oil and other feed stocks into transportation fuels, such as gasoline and gasoline blend stocks, jet fuel and diesel fuel, as well as other products, including heavy fuel oils, liquefied petroleum gas and petroleum coke for sale in bulk markets to a wide variety of customers within Andeavor’s markets. The Logistics segment includes crude oil and natural gas gathering assets, natural gas and natural gas liquid processing assets, and crude oil and refined products terminaling, transportation and storage assets acquired from Andeavor and third parties. The Marketing segment sells transportation fuels through branded and unbranded channels. Its brand portfolio includes ARCO, Shell, Exxon, Mobil, USA Gasoline, Rebel, and Tesoro.
On April 30, 2018, Andeavor and Marathon Petroleum Corp. ("MPC") announced that they had entered into a definitive merger agreement under which MPC will acquire all of Andeavor’s outstanding shares, representing a total equity value of $23.3 billion and total enterprise value of $35.6 billion, based on MPC’s April 27, 2018, closing price of $81.43.
The Complaint alleges that on May 29, 2018, in order to convince Andeavor shareholders to vote in favor of the Proposed Merger, the Board authorized the filing of a joint materially incomplete and misleading registration statement, which was filed by MPC on Form S-4 with the SEC (the “S-4” or the “Registration Statement”), in violation of Sections 14(a) and 20(a) of the Exchange Act.
The Complaint further alleges that the Individual Defendants agreed to certain deal protection provisions in the Merger Agreement that operate conjunctively to deter other suitors from submitting a superior offer for Andeavor. Specifically, pursuant to the Merger Agreement, Defendants agreed to: (i) a strict no-solicitation provision that prevents the Company from soliciting other potential acquirers or even continuing discussions and negotiations with potential acquirers; (ii) an information rights provision that requires the Company to disclose the identity of any competing bidder and to furnish MPC with the terms of any competing bid and confidentiality agreement; (iii) a matching rights provision which gives MPC four (4) business days to match any unsolicited superior acquisition proposal the Board receives; and (iv) a provision that requires the Company to pay MPC a termination fee of $600,000,000 if the Company, among other things, signs an alternative acquisition agreement.